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News: Escape the credit crunch in effortless Egypt

Thu, 10 Jan 08

Egypt is quickly emerging as a global investment hotspot in the Middle East...

The Credit Crunch and Sub-Prime lending crisis dominated the headlines in Europe and the US in the latter part of 2007. Projections for 2008 are uncertain with more and more companies and individuals are looking to invest in other markets where the crisis has not yet had an effect.

The emerging markets in the Middle East and North Africa region are the new place to invest, and with various reforms undertaken during last year to make the country more receptive to Foreign Direct Investment (FDI), Egypt is truly coming to the fore as a global investment hub.
 
Middle Eastern equities remained relatively unaffected as bank stocks in Europe and the US were undermined. Consumer confidence in the supposedly developed markets of Europe and the US is decreasing as institutional investors are turning to the Middle East and gradually private investors are following suit. Egypt has been the most successful North African attractor of FDI, while it came second in the Middle East as a whole according to a recent United Nations Conference on Trade and Development report.
 
Increased supply of luxury properties

Real Estate is becoming an increasingly focal investment sector in the Egyptian economy. The introduction of mortgage finance in Egypt has undoubtedly opened up the property market, making it accessible to those who previously were unable to find a home there.

Similarly, it has changed the dynamic of the property industry allowing for an increased supply of luxury resort style properties and ensuring that investors will see a strong return on their investment as the provision of finance allows prices to rise reflecting the increasing demand.
 
The housing market in Egypt is divided into two sub-markets. The first is domestic housing, low cost, mid-quality housing intended primarily for the domestic market. Over 200,000 units are required annually to match population growth.

For single international investors, the domestic housing market is still in its infancy and as a result will be slow to yield returns as they will be tied to domestic wealth.  However, benefits can be seen in large scale investment into this area as a result of the sheer volume requirements.

Rental market ‘evolving’

Conversely, resort style and luxury property continue to benefit from Egypt’s drive to increase tourist numbers, sustaining tourism as one of the main pillars of the Egyptian economy, allowing the rental market to evolve and pushing up demand Internationally and amongst the wealthy Egyptian community.
 
Egypt is a market that is set to continue in its growth as the government processes further reforms to make it increasingly accessible to international investors. In terms of property purchase, the strength of the economy and the fact that it has so far escaped the aftershock of the sub-prime lending crisis makes it a solid market for investment.

With increasing investment into the country and the fact that it is not a credit based society, there is much to benefit international buyers, not to mention the low cost of living and maintenance meaning that it is a sustainable investment.

For more information, please visit: http://www.ancientsandsresort.com

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