The View - investment - Emerging Real Estate

The View - investment

Economic growth and stability

Egypt has made impressive economic progress over the last few years thanks in the main to the wide-ranging reforms that were first implemented in 2004. They now have the second largest economy in the Arab world after Saudia Arabia.

The International Monetary Fund in 2008 commended Egypt for their determination to maintain the reform momentum in difficult circumstances and has withstood the international financial crisis better than many other economies. The inflation rate fell to an 18 month low in June 2009, giving the central bank more room to keep its key interest rate at its lowest level for more than a year

Egypt has an open and flourishing stock market that ranks number two in the Middle East and second only to Bahrain. It continues to receive significant levels of foreign direct investment(FDI). This reached nearly $20 billion in 2008, a 40% increase over the previous year.

Political situation

With its large population, history and culture, Egypt is regarded as a significant political and cultural centre in the Middle East. The current Government is headed by Prime Minister Ahmed Nazif and the President, Hosni Mubarak, has been in power since 1981.

Tourism

Tourism remains a mainstay of the Egyptian economy, employing more than one-tenth of the population and bringing foreign revenues into the country. The sector is one of the largest contributors to the economy, with the World Travel and Tourism Council valuing it at $18.2 billion, equivalent to 16.3% of GDP.

The Ministry of Tourism reported that foreign tourists totalled around 12.8 million in 2008, up a strong 15% year-on-year. It is forecast that Egypt will receive over 17 million visitors per year by 2020. The Sinai peninsula is particularly popular with tourists from across Europe, the Middle East and the US and nowhere in the world are there coral walls and gardens more brilliantly abundant, waters more crystalline or underwater life more varied and plentiful.

Infrastructure

Egypt’s infrastructure is currently undergoing massive investment with several large projects under construction including the upgrading of Cairo International airport and a number of local airports, major road routes and bridges and the railway system. Sharm El Sheikh airport has been upgraded and plans are going ahead for further expansion next year.

Property Market

For the past few years, Egypt’s property market has been very buoyant although it is still regarded as an emerging market with lower entry prices compared to European countries. One of the major factors behind the rising property market is the country’s increased consumer spending. This growing purchasing power and a demand for housing within the domestic market has lead to a strong resale market potential. High demand for buy-to-let properties, both for long term investment and holiday lets, in popular tourist areas such as Sharm El Sheikh and Hurghada will ensure there is a constant demand for rentals particularly with easy accessibility provided by direct flights.

Climate and Weather

Sunny all year round! Egypt is situated in a subtropical region with a dry climate, hot summers and mild winters. Winter begins in November and starts to taper off by March with warmer days, but cooler nights. Temperatures rarely fall below 40F or exceed 75F. Summer begins in April / May with low humidity and temperatures in the 70sF. From June through September temperatures in the high 80s to low 100sF can be expected.

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