credit crunch

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sdgc

New Member
Has the credit crunch affected egypt, have prices started to drop, developments slowed down etc ? :cool:
 
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Ery

New Member
No way. It is like another kindom. Besides the muslim banks dont depend on American and Europe ones. Moreover the Europe tries to atracts Asian banks to invest. Just may be now Egypt is not so crowded thats why a lot of egyptian loosed job.
 
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ofli

New Member
Well, can any agent interested in selling admit a drop in demand? Unlikely. Egypt is not another kindom. Its economy very heavily depends on tourisms among other factors. I doubt that tourism figures remain at the same level simply because thousands have lost jobs all over europe, russia and other east european counties. Egypt is not immune to the economic downturn and today being in denial of this is simply strange. Can any of the agents say how many properties have been sold by them in the last month?
 
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propertastic

New Member
There are some interesting things happening on the market, for sure.

The main factors though are less the credit crunch, but rather the very strong USD (to which the EGP is tied).

The GBP has lost nearly 25% against the USD/EGP since the autumn. The rouble (Russians being the biggest buyers in the market) is also at a 13 year low against the USD.

This has led to a two-tier pricing system coming into effect in Hurghada now. Some developers that target predominantly the UK market are keeping their prices in GBP. Others that target the Russian market are priced in USD or EGP which now makes them very expensive versus the developments priced in GBP.

As a result, these developments are really suffering.

Sales of high-end property is down against where they were last spring. However, we are seeing a huge boom in 'pocket money property'. Anything that we have on our books for under GBP15,000 doesn't hang around for long.

I think a lot of investors realize that they have little to lose and a lot to gain from investing such small sums in overseas property. What do you get on savings in the UK these days? Stick GBP10,000 in the bank for a year and you make GBP200. Put it in Egyptian property and you'll get a yield four or five times that amount without too much effort, not to mention the capital increase (and a cheap holiday as often as you can take one).

Another market that is growing fast now is the residential market - people planning on living here either permanently or to spend the entire winter here. It makes good financial sense for retirees as the cost of living is so low compared to the UK.

Developments with Guaranteed Rental earnings are also proving to be very popular. There are many developments now offering returns of 6-8% per annum which is looking increasingly attractive compared to the meagre returns from any other type of investment.

So it's a bit of a 'swings and roundabouts' situation in the market at the moment.

December and January were pretty quiet months for us, but last week was actually our busiest week since the end of May last year before things went a bit quiet for the summer.

In summary, developers and agents who know what they are doing and understand the market are doing OK, but those that don't are starting to suffer.
 
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Alan Cockayne

Banned
Egyptian immunity....

Well, can any agent interested in selling admit a drop in demand? Unlikely. Egypt is not another kingdom. Its economy very heavily depends on tourisms among other factors. I doubt that tourism figures remain at the same level simply because thousands have lost jobs all over europe, russia and other east european countries. Egypt is not immune to the economic downturn and today being in denial of this is simply strange. Can any of the agents say how many properties have been sold by them in the last month?
I've called it "Egyptianism." Developers state they are selling but fail to open registrations to people like you. Prices rise even though demand has dropped and new off-plan projects are shelved. Even in Dubai, but no country wants to admit it or cause panic.

There will only be a fixed amount of planes in the air in 2009. Market forces....
Egypt will still take the slice it needs for hotel tourism (pre-booked brochure prices) but residential visitors ??? there are no figures for this demand.

So projects will slow down through cash-flow. Resort facilities will not be completed. Rental management companies will rely ever more on placing Egyptian workers and/or their families on vacation to survive in these tourist traps..... And of course ruin them in the process.

It is happening.... Sharm is becomng another Cairo. Sharm businesses are uprooting to Marsa Alam to fleece the unknowing visitors. Its a cycle of plunder and its our cash they play with.
 
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rossantony

New Member
agent V demand

Well, can any agent interested in selling admit a drop in demand? Unlikely. Egypt is not another kindom. Its economy very heavily depends on tourisms among other factors. I doubt that tourism figures remain at the same level simply because thousands have lost jobs all over europe, russia and other east european counties. Egypt is not immune to the economic downturn and today being in denial of this is simply strange. Can any of the agents say how many properties have been sold by them in the last month?
It's slow for me, because I focus more on high end properties, aimed at the UK market. The investor buyer using UK house equity to profit out of buying abroad has definitely dropped off..but there is no shortage of baby boomers out there.

...I have in the last month managed to sell a good few units (higher than a 5 lower than a 10),all between £50 and £120K...so its actually been quite good.

definitely less enquirys, but in turn a higher ratio of decent clients.


regards
 
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ofli

New Member
Thanks for your responses. It seems the demand has dropped yet those who retain the interest are serious about their intentions. Yet, one can agree that the global recession hasn't reached the bottom yet. Exchange rate risks do not help either. So, perhaps there will be even more "swings and roundabouts" to attract a client.
 
queenie40something

queenie40something

Senior Member
The answer is to book your flights early. I booked all mine this year in December and have paid no more than £150 each for each 2 week holiday. You cant get cheaper than that for 2 weeks in sunny Sharm.
 
crombiestone

crombiestone

New Member
I dont know if it is because of the Euro almost hitting parity with the UK Pound but we have had a major increase in interest and confirmed bookings for our place in El Gouna for this year .

Also agree with Alison that thanks to Easyjet and early booking ,our flights to Hurghada for this year were less than half what we paid last year . We have also been fortunate enough to win 2 flights to Sharm for March 2010 ,thanks to the Jet2 competition . So ,barring transfers from Sharm to Hurghada,we are sorted for our next three trips at a cost for 2 of around £650 all in.

Our trip next week will be our first since the pounds weakening so I think El Gouna is going to feel quite expensive now though :eek:
 
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rossantony

New Member
crunch time

just booking a flight for my girlfriend to come out in April.

£113.

Thats the same as a dinner for two in a English restaurant.

Over 50% cheaper than the same ticket last year.

Egypt bookings are definitely on the up as more people turn away from more expensive destinations
 
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Alan Cockayne

Banned
Not sure about Ross's girlfriend being a one-way ticket.. lol. (Good on you mate)
But I returned from Sharm two weeks ago for £97 one way with 21 passengers.

Family holidays are charged much higher, especially in school vacation times and mid-terms. Supply and demand I'm afraid.
Check regularly for the best deal on-line or Teletext.

Or in Ross's case, don't have kids to worry about...

Cheers guys.

Alan Cockayne
 
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rossantony

New Member
yes one way...

actually just booked £103 not £113 - that's on 13th April.

one way on easyjet.
 
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Alan Cockayne

Banned
Flightsand the economy

Those prices are brilliant but unfortunately there aren't many options from the North.
True... My flight was to Manchester and arriving so late in the night, travel options out of the airport were difficult.

We had some inaugural flights out of Doncaster- Robin Hood Airport last year. Smooth operations but Thomson need more persuasion to add more this year. East Midlands and Bristol are other options with occasional flight from Newcastle, but I think more expensive.

As I see it, travel agents will want to make money or close. Tour operators will want to keep working or close, so they have to get their act together and fly to those places that can handle mass tourism. The all year round Red Sea locations are perfect and the hotels are ready for us. So will the resorts be.

LISTEN UP TOUR OPERATORS and Travel Companies..... STOP BEING GREEDY.
If demand is created by reducing your prices, we all win. If flights are reasonable and from more locations, Residential Tourism will thrive..... and it keeps people and the economy working. (Who wants to save in a bank these days?)

Should I shout it at Gordon Brown from the Robin Hood Airport roof-top?
Simply, OPEC oil prices should have more regulation and less City speculation.

Aviation Fuel prices can be bought in advance and pegged to allow for forecasted travellers. Actually to do this, it's about doing one's job thoroughly and professionally. (Now this grumpy old git from Sheffield will get it in the neck from my friends at Thomson. lol)

Alan Cockayne
 
crombiestone

crombiestone

New Member
True... My flight was to Manchester and arriving so late in the night, travel options out of the airport were difficult.

We had some inaugural flights out of Doncaster- Robin Hood Airport last year. Smooth operations but Thomson need more persuasion to add more this year. East Midlands and Bristol are other options with occasional flight from Newcastle, but I think more expensive.

As I see it, travel agents will want to make money or close. Tour operators will want to keep working or close, so they have to get their act together and fly to those places that can handle mass tourism. The all year round Red Sea locations are perfect and the hotels are ready for us. So will the resorts be.

LISTEN UP TOUR OPERATORS and Travel Companies..... STOP BEING GREEDY.
If demand is created by reducing your prices, we all win. If flights are reasonable and from more locations, Residential Tourism will thrive..... and it keeps people and the economy working. (Who wants to save in a bank these days?)

Should I shout it at Gordon Brown from the Robin Hood Airport roof-top?
Simply, OPEC oil prices should have more regulation and less City speculation.

Aviation Fuel prices can be bought in advance and pegged to allow for forecasted travellers. Actually to do this, it's about doing one's job thoroughly and professionally. (Now this grumpy old git from Sheffield will get it in the neck from my friends at Thomson. lol)

Alan Cockayne (Coralife-Style consultants)
Oh how I pray for a Hurghada flight from Newcastle . Flights to Sharm have proved very popular . Thomsons tried Luxor for a summer 2 years ago but there wasnt the demand and they were pulled . I wish they would at least give Hurghada a try.

At lease the trains to London are reasonable if you book early and Travelodge sale rooms at £9 a night mean that getting to and overnighting in London isnt too expensive ....just time consuming . It just means the holiday starts a day earlier :cool:
 
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rossantony

New Member
how to travel..

Those prices are brilliant but unfortunately there aren't many options from the North.
We live in the South but commute to London the day before and stay in a Hotel close to the Airport. Costs the same as the parking with Hotel thrown in. I have the name of the company I use if anybody wants it.

It is just as easy to take an internal flight from Manchester or Glasgow to London Gatwick.
 
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ofli

New Member
I thought this article is relevant to the discussion here about demand for tourism and properties. It is developer's opinion.

"(Bloomberg) Samih Sawiris, the Egyptian entrepreneur with real-estate investments from Morocco to Oman, has slowed construction of luxury hotels and resorts as clients postpone the purchase of new homes and delay vacations in the global recession.

Sawiris’s Orascom Development Holding AG(ODHN) will scale back building work in Oman and Egypt and has delayed the start of sales of condominiums and villas in Switzerland until the second half. Construction of a resort on the coast of Montenegro won’t begin for another two to three years, Sawiris, 52, said in an interview.

“There is a slowdown in demand,” said Sawiris. “It’s not dramatic, but it’s across the board.” A 24-month decline in sales of real estate and vacations is a “fairly accurate assumption.”

Demand for property in Orascom’s El Gouna resort on Egypt’s Red Sea coast has fallen by as much as 40 percent as banks tighten lending in the financial crisis and economic growth slows. Abu Dhabi’s two largest property developers, Sorouh Real Estate PJSC and Aldar Properties PJSC, last week said fourth-quarter profit plunged on fewer land sales. "

full article is here https://www.arabfinance.com/News/newsdetails.aspx?Id=130050
 
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Alan Cockayne

Banned
I think the investors that originally planned to borrow from the equity in their homes here in the UK are more likely to struggle by finding that they have neither the equity they thought, or have difficulty getting a mortgage advance now.

That, coupled with the fear of unemployment, will have put many people off from making the leap just at the moment and building companies will delay projects now for this reason.

I also think we may even see part completed apartments being sold at a loss by investors who have had a change of circumstances since placing their early instalments and now need to offload in a hurry.

On top of all this we have the added worry of developers not being open and honest in their dealings making off plan far too big a risk these days in certain countries.Look at what is happening recently in Dubai and Hurghada where people stand to lose most if not all of their investment while lawyers scramble to find who had their money last.

Then of course we have rising oil prices and therefore flight costs and with people having less disposible income anyway, they are tending to stay at home for their holidays.
This was all foreseable late in 2007 early 2008 when mortgage companies offered senseless 100-120% loan to value without question. Coupled with OPEC greed in oil prices and City marketeers on the band-waggon we knew it wouldn't last.

The winners were the early investors who are now in their properties. However, buy-to-let owners must worry they won't get tenants if there is a decline in tourists. Let's hope those companies with guaranteed rental schemes actually honour their client contracts.

I've been advocating Escrow Accounts for years. Developers hate them, they lose control. Lawyers will now have to be accountable, so let's see how professional they should be with their operating licenses.

Alan Cockayne -
 
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Alan Cockayne

Banned
Escrow Accounts


well said Alan.

Escrow accounts show an honesty on the part of the developer/builder so surely in their interests to do so if they intend to produce what you are paying for.

Considering the number of large companies going under these days, I think it would be crazy to consider buying off plan with anyone now who refuses to use this method of securing money


Thank you for the compliment....

For the benifit of readers who are thinking of buying in Egypt and asked for deposits (usually around 30% of the property asking price) they must INSIST their money goes through an Escrow Account.

It is a client Holding Account or Stakeholder Account which can be set up by a reputable finance house or legally qualified personnel, i.e. your lawyer, your Estate Agent (who should be working primarily for you and not just the developer) a notary or your own bank, to safeguard the passage of payments to developers.

These payments are made on request to the bank. Basically you release them from funds you have deposited in it if you are satisfied the money is being used for the purpose intended. An agreement is drawn up specifying the conditions that need to be met prior to money being released.

In other words, "the person operating the escrow account needs to define precisely what authorisation (whether written or oral) needs to be provided and in what form. On the provision of such information or confirmation, money is released to the party who will benefit from the account."

The Account should be free of costs as it gains no interest, that's why Egyptian banks hate to open them. However, there is a cost for servicing the payments so choose an unbiased operator preferably not connected to the developer. If your own local solicitor is dealing with the contract of sale, it may be wise to add this service.

If you are thinking to hire an Egyptian lawyer, again choose a solicitor not "in bed" with the developer or the Egyptian flawed system. Do some research by checking out recommendations and their fees.

I hope this helps and safeguards your money.

Alan Cockayne.
 
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rossantony

New Member
[/I][/I]

Thank you for the compliment....

For the benifit of readers who are thinking of buying in Egypt and asked for deposits (usually around 30% of the property asking price) they must INSIST their money goes through an Escrow Account.

It is a client Holding Account or Stakeholder Account which can be set up by a reputable finance house or legally qualified personnel, i.e. your lawyer, your Estate Agent (who should be working primarily for you and not just the developer) a notary or your own bank, to safeguard the passage of payments to developers.

These payments are made on request to the bank. Basically you release them from funds you have deposited in it if you are satisfied the money is being used for the purpose intended. An agreement is drawn up specifying the conditions that need to be met prior to money being released.

In other words, "the person operating the escrow account needs to define precisely what authorisation (whether written or oral) needs to be provided and in what form. On the provision of such information or confirmation, money is released to the party who will benefit from the account."

The Account should be free of costs as it gains no interest, that's why Egyptian banks hate to open them. However, there is a cost for servicing the payments so choose an unbiased operator preferably not connected to the developer. If your own local solicitor is dealing with the contract of sale, it may be wise to add this service.

If you are thinking to hire an Egyptian lawyer, again choose a solicitor not "in bed" with the developer or the Egyptian flawed system. Do some research by checking out recommendations and their fees.

I hope this helps and safeguards your money.

Alan Cockayne. Coralife-Style Consultants.
very few developers here have escrow accounts set up, so insisiting on something that is not offered may not be possible. lately I have been getting clients who have not had there property delivered on time, and they have wished to pull out of the contract. They have been able to do this as the contract stated this was an option. So escrow is not the only option, nor is it a cure all. It is possible to contractually protect your interests as well.

Having said that I am of course a fan of correctly managed escrow accounts.

regards
 
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Alan Cockayne

Banned
very few developers here have escrow accounts set up, so insisiting on something that is not offered may not be possible. lately I have been getting clients who have not had there property delivered on time, and they have wished to pull out of the contract. They have been able to do this as the contract stated this was an option. So escrow is not the only option, nor is it a cure all. It is possible to contractually protect your interests as well.

Having said that I am of course a fan of correctly managed escrow accounts.

regards
I agree Ross, contracts can be made to fit client needs. - The very principle of marketing.

In saying that, clients can find their own banks to work through the payment plan with their Escrow account. As I see it, developers don't like this either, but it can be stipulated in the contract.

Contracts should work both ways. If the developer does not agree then the a client can go elsewhere. There are plenty of good projects we have to offer them for sure.

Regards.

Alan Cockayne
 
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