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Buying a Property in Egypt

Egypt's property investment potential

As with any emerging market, there is no guarantee of positive capital appreciation in Egypt. Having said that, for the few years that it has been on the international radar, the country does boast a successful track record. In fact, annual growth of between 20 and 30 per cent is often cited.

In addition, low entry prices can mean that investors are able to enter the Egyptian market on a cash basis, therefore saving thousands of pounds per year in interest rates. Rental potential is also good, providing you chose wisely, as Egypt has a strong tourist trade thanks to its ancient culture and excellent diving. Easy access, a good climate, increased inward investment and a favourable tax regime complete the picture. Therefore, the ‘guaranteed’ rental returns promised by many Egyptian developers are quite believable – just ensure that the asking price doesn’t over-compensate for these in the first place.

Health and education

You may be required to produce proof of vaccination against certain diseases, such as yellow fever and cholera, depending on which country you enter Egypt from. However, even if you are arriving directly from the UK, it is advisable to have jabs for typhoid, paratyphoid and, for those travelling into Upper Egypt, hepatitis B, before arrival.

Wherever in the country you are travelling, it is imperative that you take out adequate travel and health insurance – especially as there are no reciprocal healthcare agreements between Egypt and the UK. Egyptian medical facilities are not up to western standards, and, while it is possible to receive private treatment you will need to be able to produce a guarantee of payment from your insurance company first.

There are two recognised International British Schools in Egypt, however both of these are situated in Cairo. The large resort of El Gouna on the Red Sea Coast also boasts a co-educational international school which is based on the English curriculum. Entry is based on a successful interview and examination results.

Transport

Both British Airways and EgyptAir operate regular direct services between Heathrow and Cairo International Airport. Once in Egypt, it is possible to get connecting internal flights to the resorts such as Hurghada. If you wish to stay on terra firma, however, there are a range of options available to you. All of the large towns are connected by rail, with services both frequent and efficient. Although be advised that you will need to book seats in advance.

The road network is also well developed and it is easy to hire a car, complete with driver, from all of the major tourist destinations. Just one word of caution – agree the fare before you get in! The cities offer bus, tram and metro services. However, metered, air-conditioned taxis are perhaps the best mode of transport for foreigners that don’t speak Arabic. Once again, agree the fare before you start your journey.

However you decide to travel, be aware that certain areas of Egypt still require permission from the security authorities before you can enter. All British travellers should consult the Foreign and Commonwealth Office before setting off.

And finally…

Real estate agents in Egypt are not regulated, so it’s imperative that you do your homework before buying. It is also important to realise the sheer youth of this market – many agents and developers haven’t been around for long, so there may not be any previous work to examine. There is also no guarantee that the developer won’t go bust – hence your need for comprehensive legal advice. It is your solicitor’s job to ensure that the development has a comprehensive bank guarantee should the worst happen.

The sheer scale of building currently underway is also something to consider – especially if you are buying solely for investment purposes. While rental opportunities are currently good, there is nothing to say that this short-let market won’t become saturated when all of these developments reach completion. The recent bombings in Sharm el Sheikh may also have an impact on tourism.

Finally, upon application of a residence permit, don’t be shocked if you are asked to produce a certificate confirming that you are free of HIV.

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More pages

Page 1: Why buy property in Egypt?
Page 2: Financing a property in Egypt
Page 3: Egypt's property investment potential

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