New Egyptian developments a bargain for British investors

Egypt is a country of extreme contrasts. You have the timeless quality of the Sphinx and the Pyramids and the manic hustle and bustle of Cairo, Africa's biggest city. But for most British property buyers, Egypt means one thing – the Red Sea. Massive developments in the Sharm el-Sheikh region, the Red Sea's premier resort, have propelled Egypt into the first division of overseas property buying destinations.

"Destinations like Sharm el-Sheikh, only five or so hours away from Britain, are more and more popular not just with the UK market but with Italian, French, Scandinavian, Russian and Ukrainian tourists with its year-round sunshine," said Loxley McKenzie, the managing director of Egyptian specialist estate agency Colordarcy.com. "Demand for rental accommodation is high throughout the year, as opposed to only four to six months in other destinations like Turkey and continental Europe."

However, you have to choose your location wisely. Take, for example, the cautionary tale of Hurghada, once a tiny fishing village by the Red Sea before the airlines and then the developers arrived. "Almost overnight, Hurghada became a property development hot spot. Firms moved in from Europe and started marketing the place, persuading the Egyptians that they would bring new wealth to the region," said Neil Hollingsworth, a senior manager at Egypt and Turkey property specialist Rivermead Global Property (Rivermeadglobalproperty.co.uk).

"However, some of these master developers simply took the buyers' cash and then didn't pay the Egyptian firms which had built the properties. Understandably, the Egyptians wanted their money so seized the properties, meaning the buyers had paid their money but couldn't move in. It was a complete mess."

Con men simply running off with buyers' deposits isn't the only pitfall with Egyptian property. "A not uncommon problem buyers have is seeing a picture of the plan of a property at what seems like an incredibly cheap price, only to discover once it is built that the reality bears no resemblance to the original plans," said Mr Hollingsworth. To safeguard themselves further, Mr Hollingsworth urges buyers to use an independent solicitor who lives away from the area where the property is located to ensure no conflict of interest.

This problem can be sidestepped by buying second hand. Another alternative is to go with one of Egypt's massive development firms such as Orascom, which is behind the El Gouna development (www.elgouna.com), a short drive from Hurghada between the east Egyptian mountains and the Red Sea. El Gouna is a mature development with a marina, championship golf course and another under way. It is also huge – regularly catering for 22,000 visitors a week in high season – with masses of shops, bars and restaurants. The resort itself has a real community feel, with an estimated 12,000 permanent residents living in apartments and villas near the beaches and man-made lagoons that are dotted around El Gouna.

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