Why buy property in Egypt?

At just five hours away from the UK, Egypt is a world apart. A rich culture that is steeped in history is the backbone of this nation, and the reason why tourists have been flocking here for years. It was inevitable that the property market would follow hot on its heals, and now second-homers, retirees and investors are flooding Egypt's property market.

Attracted by the low cost of living and year-round sunshine, many buyers are ditching traditional home buying destinations in favour of Egypt – assured by promised rental returns. Sharm el Sheikh is renowned for its diving, El Gouna boasts a luxury marina and Hurghada has no less than eight golf courses planned – all factors which should keep the accommodation-hunting tourists coming back again and again.

In addition, the sheer youth of the market bodes well for positive capital appreciation, while the tax situation is extremely favourable. All in all, Egypt seems to tick all the right boxes for overseas property buyers.

Popular property locations

The two most popular regions with the tourists who flock to Egypt are the beautiful and sunny Red Sea coast; and the daunting, noisy and fascinating capital, Cairo. However, there are plenty of opportunities to own property across Egypt and with the speed of development in the past few years, there are likely to be a good number of new resorts opening up soon.

And, if you are talking about the Red Sea coast, one of the most important resorts is El Gouna. Located around 30 kilometres from Hurghada, this purpose-built resort offers everything the second-home buyer could wish for; 13 hotels, an 18-hole golf course, a marina, school, and hospital all compliment the expected shops, bars and restaurants. Prices for a one-bedroom marina apartment at El Gouna start from around £130,000.

Meanwhile it is Sharm el Sheikh that still has the monopoly on the tourist crowds. Known as one of the best diving locations in the world, Sharm is now attracting the masses as a year-round tourist destination. Sharm also has a vibrant old town area with more traditional restaurants and cafes to soak up the local flavours. Prices here have doubled in the past two years and, due to the fact that no more building licences are being granted, look as though they are going to continue to rise for some time yet.

More purpose-built resorts are being built along the coast of the Red Sea all the time, each one learning more from the experiences of the last so that the latest resorts are some of the most modern and well-designed in the whole region. Many of these resorts are around Hurghada, the coastal town that provides much of the focus for tourists in the area. More international flights are arriving into the airport all the time, and as the local infrastructure develops, so more tourists are attracted to the area.

Hurghada itself is one of the most important overseas property destinations in Egypt, and attracts lots of visitors of its own accord, rather than just being an airport transit town. The sandy beaches, warm waters and diving facilities, combined with the extensive golf facilities that are already in place and being constructed, make this a well-established destination in its own right.

Sahl Hasheesh is less than 20km from the international airport, and has been building high-end resort properties for the domestic and foreign investment markets for a couple of years. More new developments are planned for further along the coastline, and expect to see the name of Marsa Alam cropping up as an overseas property location in the near future.

Cairo, logically, is the focal point of the country in terms of business and international relations, and there is also a significant student population in the city attending the universities. Investment properties in the city can be very profitable, though they are more likely to stay as investments rather than being used as holiday homes. For all the proximity to the Great Pyramids and the ease of access to the city, Cairo is not exactly a place to spend a relaxing break – the bustling, loud and occasionally dirty city can be stressful for foreign visitors.

Residents of Cairo escape to Alexandria for a break from the city. The ancient capital of Egypt and its largest seaport is developing into a modern resort for the domestic tourism market in Egypt, which means that the international crowds are likely to follow soon.

Finally, there is extensive construction of hotels and resort facilities in the southern city of Aswan, on the banks of the Nile. The attractions of the famous dam across the Nile, and the archaeological relics of this ancient city are bringing tourists in, and development here is likely to continue for some years.

The buying process

Once you have decided on a property you will be required to pay a holding deposit of ten per cent. Before you hand over any money however, it is imperative that you follow the following five basic steps. Firstly you must get your solicitor to check the registration status of the property – a drawn-out process of around four months, which is executed by examining the title deeds. Despite registration being a legal requirement, only ten per cent of Egyptian homes fulfil this requirement, so if you are buying a resale home it is best to be prepared for bad news at this stage. Secondly, your lawyer will need to ascertain whether there are any outstanding debts registered against the property. If there are, again, it is best to simply walk away.

The third step is to ensure that all real estate taxes levied against the property are fully paid and up to date, while the fourth is to review and sign the sales contract. Be aware that this contract is not legally binding unless it is bilingual. Lastly you must register the purchase through the courts – a process which costs around £500.

Legal issues

As mentioned above, obtaining a property that has clean title can be difficult. In the past, many property transactions simply took place between the buyer and the local landowner – without the necessary paperwork to determine who the new owner was. Thousands of other properties were handed down from generation to generation meaning that, in some instances, around ten members of one family could stake a claim in the property’s title. In order for the sale of such a property to take place all ten members must therefore agree. In addition, the registration process was expensive, resulting in many transactions taking place under the table. This cost has recently been reduced, however, from 12 to three per cent so buying a fully registered home should get easier as time goes on.

You will also need to establish whether your property is freehold or leasehold. For the majority of new-builds in resort developments it is likely that they will be leasehold, with a 99-year lease. Some older resorts may only offer 50-year leases however.

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