My wife and I just returned from our honeymoon in Egypt and unfortunately for her it wasn’t particularly romantic because we unintentionally spent a lot of time buying two apartments. Sharm is a holiday resort on the south of the Sinai peninsula. Italians and Russians have been going for years and now British tour operators are catching on to the place. We flew with Thompson who are doubling their flights this year and plan to double them again in 2006! The majority of the residences in Sharm are 5* international hotels, such as Hilton, Sheraton etc. But a holiday apartments and villas are now being built due to the demand from Russians and Italians. The place very much reminds me of a young Dubai. My wife bought two 2 bedroom apartments costing £22,000 each. They are off-plan and will be finished in Dec 2006. On completion they will be worth at lest £35,000 each (still a bargain for a 80 sqm 2 broom apartment on a 5* complex with Red sea beach access!) and on top of this the Sharm market is growing by 10% a year anyway. My parents just bought a 120sqm 3 broom apartment on the same complex for £32,000 which will be worth £55,000 when completed. As well as off plan we were shown ready made apartments in the Naama bay town centre. They have a v nice communal pool and the 1 broom apartments are £18,000 each! You can get 14% yield from these with rentals (so we were told) increasing all the time. My wife went for the off-plan option though. Anyway – I’m a keen investor but I hadn’t heard of the Sharm market so I thought I’d let you all know about it too. My wife and I have a lot more details to share so if you are interested please send an email: pook_sean@hotmail.com One last thing: has anyone else invested there before? Thanks.

Interesting, However do you know the likely direction of the exchange rate between the Egyptian pound and sterling. Not much good if it devalues. A friend of mine bought two apartments in Egypt a number of years ago and due to devaluation these are worth less than he bought them for. If you know more it would be good to know Martin

Hi, You are absolutely right to consider this as an important factor. I just checked the 5 year chart for exchange rates and it seems like your friend was really really unlucky. He bought right before the EGP went from 5 to 1 GBP to what is now 11-1. In 2002 my wife's apartments would cost her £40,000 each to buy, but after 2004 they cost only £20,000. Similarly I guess your friends' place halved in value. Looking at the chart it seems now is an historically excellent time to buy in Egypt. We're hoping it does plummet to 5-1 again so we can double our money - although this will reduce the number of prospective british buyers of course. Good post!

This is an interesting post. Do you know what the foreign ownership laws are for egypt and can you give more information on the purchasimg procedure as well as any pitfalls you have heard about if any. Have you had anymore information on the rental yeild? I have just come back from an investment trip to Cyprus and although the prospect out there look good I am not convince that it is a better option than Sharm.

I too have been researching Sharm with a colleague who is going out there next month. A lot of the new developments seem to be around Nabq bay. Which area of Sharm did you buy in and what do you see as the best area Regards Noel

some brief comments I have about Egypt and Sharm. Positives: - almost guarenteed sunshine - growing tourist market - extremely cheap prices Negatives: - Very poor legal system It's a risky area but with that comes potential for profits. I'm interested but I don't think it's quite worth it until I can get a higher level of confidence in the legal system. I would also suggest to look at Dahab nearby to Sharm which is a backpackers and divers paradise but is going to change rapidly

This sounds like an interesting area and worth a little research. Does anyone know any decent websites that I can get info on new builds / prices etc. Any help much appreciated.

right, i'm off! I suppose another drawback would be the finance,or lack of it.Any idea on cap tax? I seem to remember there wasn't any when i went to a seminar last year.

An issue I had when looking at investing in Egypt was that it is not possible to get a mortgage and leverage your investment. It doesn't make sense to me to put down 100% cash on a £100k property. I still think good percentgae returns will be possible for people who want to use up a lot of capital in their investments. The Egyptian stockmarket has gone absolutely crazy in the last year and I expect a sell off there soon. Sometimes this does good things for the local property market as people shift asset classes. I personally think Dubai is quite a good place to invest in if you pick a government backed developer and a Villa instead of an apartment. Rent yields are extremely good, the property law is about to be officially changed so that foreigners can own freehold. The changed property law should help people to get high LTV mortgages. I think a secondary market is emerging especially for Villas as more poeple come to work in a growing, tax free economy. I also think it is starting to change from a place of the future to a place that is now starting to look good. When the Palm is 100% complete it will change things. I know there are negative factors such as oversupply of apartments and the growth appears too rapid but I would rather invest in Dubai than in Egypt if I can leverage the investment there.