Ready to Move In - or - Off-plan - is there a shift in buying attitude ?

[Peter Mitry]

Looking Good

Despite the general economic situation there are still buyers around with cash to spend on completed developments. We have had more enquiries (and sales) since Christmas than in the previous 3 months, which I beleive is because we have something that is no longer off-plan (and it looks great of course).

Hi Nigel you must be very proud; your building looks great and I am sure you learned a lot during the build process. Give me a call next time you are out it would be good to meet finally.

What advice would you give to the many people on the forum who are thinking of doing the same thing. Would you do it again?

 

[Red Sea]

Hi Nigel you must be very proud; your building looks great and I am sure you learned a lot during the build process. Give me a call next time you are out it would be good to meet finally.

What advice would you give to the many people on the forum who are thinking of doing the same thing. Would you do it again?

I guess Nigel was lucky to finish the projects in such nice way as I guess people now coming aand looking for most ready properties and coz of world economy people getting afraid from off plan I guess

 

[morfa]

pyramid beach

has anyone else on here transferred from the pyramids 2 development in hurghada to the pyramid beach development

 

[dave99]

Dead right

We were lucky to have such a good team - all credit to them - not evrything is perfect but I'm very happy with what has been achieved in the time we took.

I guess Nigel was lucky to finish the projects in such nice way as I guess people now coming aand looking for most ready properties and coz of world economy people getting afraid from off plan I guess

 

[dave99]

Things we've learned

Peter
Thanks for your kind words. Yes I am proud of what has been achieved, by our team.

I'm hoping the get back early March - we could maybe meet then.

Building a whole block of apartments, even only 24 is big thing to take on.

Lot to tell but 4 key things:
1. cannot be done without the perfect partner on-site all the time
2. choice of builder is a make or break thing and is impossible to get right without local "expert" knowledge
3. It takes up more of your time than you think it will
4. Always expect the worst and then you might have a chance of a pleasant surprise.

Do it again ? - yes, but not this year, and maybe with additional partners

Hi Nigel you must be very proud; your building looks great and I am sure you learned a lot during the build process. Give me a call next time you are out it would be good to meet finally.

What advice would you give to the many people on the forum who are thinking of doing the same thing. Would you do it again?

 

[dave99]

Some support for "Ready to Move in" developments

Just noted that the forum news letter is giving some support to the view that there is a shift to buying "ready to move in" property, at least for a while.
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[charliesurf]

In light of recent developments, there appears to be less stress involved in buying ready to move in property.

We can all but hope that developments are finished as promised, and paid for

C

 

[rossantony]

bigger picture..

I think we maybe losing sight of the bigger picture here.

The demand for finished units has always been steady. I regularly sell finished units to people who are looking for something ready to move into, as the region is very suitable for the retirement market. We have always had the buyer who is not interested in making money or renting, and wants to buy for there own use. If I had to put a figure on it I would say they make up about 30% of our business here.

There has been a definite drop off on business from buyers looking to purchase through equity release. Obviously this has everything to do with the UK mortgage market and the global crisis and nothing to do with Egypt. This drop off in business is worldwide and there are professional people within the industry qouting that there looks like a 75% slow down in the business of oversales property.

I think for this year the investor/equity release buyer will dissapear. This is obviously a worry as the "off plan " development and the overseas property market is fuelled and designed for this kind of buyer.

In emerging markets there are always winners and losers. Some projects in Hurghada have not gone ahead due to one reason or another. However many off plan developments that were began 2/3 years ago are just completing, with very good returns for the original investors.

Looking to the future, I would say the fact is that Hurghada/Sahl Hasheesh/El Gouna has just about got itself together, and that there are developers that have some real quality off plan projects on offer. I would suggest there are about 15 decent off plan projects in the region ranging from 30k entry level up to the £1,000,000 level.

To conclude I think the swing to ready built in Egypt as per the article is not seeing the real picture. There has just been a big drop off in equity release investors. Obviously the industry hopes that once the UK housing market prices stop decreasing, the banks begin lending money again, and that interest rates remain low the business will pick up again.

And my tip for people looking to purchase. On Off Plan, I see a shift away from the cheap and large off plan developments to more upmarket bespoke off plan projects. If you are looking to invest under 50K I think the ready built market is the place to be. If you want value, quality, and guaranteed returns look at spending 50k plus on off plan, on a high end development.

regards

 

[Alan Cockayne]

Alan Cockayne of Coralife-Style

[COLOR="DarkRed"]Is it true that there is currently a shift away from buying off-plan towards buying properties that are actually completed (or just about).

Is it possible that buyers are looking for more certainty about what they are buying rather than hoping for a good deal because what they are buying is maybe 18 months or more into the future.

Is this a knock-on affect from late running projects, some of which are being reported on this and other forums, or a consequence of the world situation or what ???[/COLOR]

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My company is finding more enquiries for completed or nearly finished properties, for a variety of reasons. I shall cover a few.

Overseas property is fast becoming a "buyers' market" and as Egypt residential tourism has depended on cash-buyers' those with cash can demand a more resonsible sale price.

We see many early "off-plan" investors now want to "flip" their purchases before the last payment and full registration hoping for a profit. In the current economic climate and as more properties come onto the market simultaneously, they may not find the original value (we recognised negative equity in th 90's)

This is especially true in Sinai where project prices have escalated beyond all reason. More than doubled in 2 years even though there is now a recession projects managers still push up prices. Call it greed on the developer's part. I've named it "Egyptianism."

Egypt feels exempt from global trends but will learn the hard way over time.

We know Sharm as a political and business playground and not because the standards are higher..... Far from it. There are no independent valuation officials to push for higher health and safety and building standards. Inflation through greed and not from quality.

Buyers beware. Due Diligence is not about owning the land to build on but also having the capital to build the projects, even without your investment cash.

How many Egyptian Developers can say that and complete to schedule including the Resort facilities. European ones can. They have the practical experience.
Clients now want to see actual properties, not virtual ones.

Maybe there is more global competition for your cash to complete existing projects. We find Dubai cutting back on $15 Billion worth of new projects and like Egypt offer no realistic mortgage facility.

Whatever the current climate, our aim is to help you buy in Egypt trouble free. If one researches carefully, it should be.

Alan Cockayne.
CEO of Coralife-Style.

 

[Alan Cockayne]

Alan Cockayne of Coralife-Style

I think we maybe losing sight of the bigger picture here.

The demand for finished units has always been steady...................

In emerging markets there are always winners and losers. Some projects in Hurghada have not gone ahead due to one reason or another. However many off plan developments that were began 2/3 years ago are just completing, with very good returns for the original investors.

Looking to the future, I would say the fact is that Hurghada/Sahl Hasheesh/El Gouna has just about got itself together, and that there are developers that have some real quality off plan projects on offer. I would suggest there are about 15 decent off plan projects in the region ranging from 30k entry level up to the £1,000,000 level.

And my tip for people looking to purchase. On Off Plan, I see a shift away from the cheap and large off plan developments to more upmarket bespoke off plan projects. If you are looking to invest under 50K I think the ready built market is the place to be. If you want value, quality, and guaranteed returns look at spending 50k plus on off plan, on a high end development.

regards

Precisely Ross.

Mainland Egypt is the new market-place. From Ain Soukhna to Marsa Alam.
Freehold, less legal restrictions and vigin Red Sea locations.

Value for money is our motto.

Alan Cockayne.
CEO of Coralife-Style./COLOR]

 

[dave99]

Value for money now V in the future, cystal ball stuff ????

Value for money - that's great but how do you work it out - for example how can you put a value on buying a ready to move into apartment, virtually hassle free that costs £X and what value on something 18 months into the future costing £Y.

A "bird in the hand" comes to mind.

Precisely Ross.

Mainland Egypt is the new market-place. From Ain Soukhna to Marsa Alam.
Freehold, less legal restrictions and vigin Red Sea locations.

Value for money is our motto.

Alan Cockayne.
CEO of Coralife-Style./COLOR]

 

[dave99]

Less stress - just what the doctor ordered

Hi charliesurf

Whether it's buying a property or a car, or just a new TV, I always have to compare everything before I buy and produce a sort of list of the pros and cons, all very objective, but the silly thing is I never think about the stress that MAY be involved. Maybe that's because I always assume that the risk is low, hence no stress.
I suppose looking back 2 years at the start of my development that was a whole different ball game, not buying something but building it instead.
Hopefully though, most (if not all) of my owners have avoided the sort of the stress other people are currently enduring (based on other threads on this forum).

Buying "ready to Move-in", means a much shorter period of time during which a buyer might encounter any stress, which must be a good thing, and that reduce stress is potentially even more important than some of the other criteria that may be used in the decision to buy process. But does anybody add it to their list of pros and cons - I doubt it !

In light of recent developments, there appears to be less stress involved in buying ready to move in property.

We can all but hope that developments are finished as promised, and paid for

C

 

[morfa]

pyramid beach resort in hurghada

i have recently transferred to the pyramids beach resort development,from the pyramids 2 development.has anyone else.is the pyramid beach looking a good investment

 

[Peter Mitry]

Not everyone can afford the luxury of buying a finished property and often those available are not in the areas people want.
There will still be many who consider the risks of 'getting in early' are worthwhile but please remember the basics.

1. Use a good agent who does not deal with suspect Developers
2. Use a good lawyer who others have used before and are willing to recommend
3. Check out previous projects from the Developer have been finished on time and are acceptable

If you remember these key areas you will avoid many of the pitfalls others have encountered.

 

[rossantony]

how to work it out.

Value for money - that's great but how do you work it out - for example how can you put a value on buying a ready to move into apartment, virtually hassle free that costs £X and what value on something 18 months into the future costing £Y.

A "bird in the hand" comes to mind.

I guess that you estimate the capital growth afforded to you, by studying growth trends. (Time = T) If you then combine this figure with the amount of leverage (L)you get on your invested capital which will give you the Y figure. This will give you a % yield figure or ROI (return on investment) figure.

You measure that against current prices which is the X figure.

if the value of x - L + T > y buy resale/finished

if the value of y - L + T > x buy off plan

the obvious flaw in the above algebra is that you have to estimate growth, and so the outcome is unpredictable. I guess that what makes it an investment in the future. That's why there is competition between countries and developers.

Dave havn't you being selling your development off plan for the last two years? Is your current shift to reccommending finished because your building is now...finished?

 

[NeilHollingsworth]

Not everyone can afford the luxury of buying a finished property and often those available are not in the areas people want.
There will still be many who consider the risks of 'getting in early' are worthwhile but please remember the basics.

1. Use a good agent who does not deal with suspect Developers
2. Use a good lawyer who others have used before and are willing to recommend
3. Check out previous projects from the Developer have been finished on time and are acceptable

If you remember these key areas you will avoid many of the pitfalls others have encountered.

Peter, these pointers work very well normally however i have really had my eyes opened in Egypt as to who you can and can't trust and you are no doubt in the same boat. At the moment i would say there are not many you can trust and it is a real shame becuase the Egyptian property market could have been so good for so many reasons. I say could because i think certain parties have now completley spoilt it and it will take a long time to recover the confidence, look how many agents have pulled out for a start and how many unfinished developments there are.

I think ready to use will be safer and less hasssle, it will be interesting to see how many stories are put on the "Good News Thread"

This is not a dig at anyone but something i think most people would back up, there are so many people in some very bad situations and no-one seems to be doing anything to keep the Egyptian property market alive

 

[dave99]

Is there a shift ?

This is an open question - however happy to give my view now you've asked.

The experience of selling over the last 2 years is very valuable HOWEVER, it was done during a much safer financial climate. Going back 12 months I was still a strong advocate for "off-plan", 6 months ago I would not have advised anyone to look further than 6 months into the future. 3 months ago I was not suggesting anything but completed developments, and that reflects the worldwide financial situation, added to specific knowledge of the market in Hurghada.
There will always be good, safe, long term investments to be found going the off-plan route, I just think that now that there is more choice in Hurghada of completed developments, is it really worth that extra risk of waiting the 1 or 2 years that might be required. I think that for the next year or so many people will modify their risk profile to match their personal level of confidence which I think will mean less off-plan sales, even where the potential gain is better.

It's true that Red Sea Residencia is finished, and therefore my personal risk of non-completion has past. I've been very lucky that my team have finished on-time and that I'm able to show potential buyers the finished product.

The fact that I'm not currently looking to start anything new, with off-plan selling, is due primarily to the very different market place which makes forward planning with any certainty very difficult.

Dave havn't you being selling your development off plan for the last two years? Is your current shift to reccommending finished because your building is now...finished?

 

[rossantony]

price bracket

Dave I agree entirely with what you have just said, as that is how it relates to you.

If I was looking to buy within the 50k and under bracket I would seriously consider looking at everything available that is finished or near completion. As such I have plenty of that type of property on my books.

However there is little finished product available in the higher end of the market.

A lot of my clients want to purchase in the 100K bracket and as such they have to look off plan, or pay a heavy prenium for getting onto one of the few decent quality finished projects here.

regards

 

[dave99]

£100K plus - must be a UK Banker !!!

Hi Ross

I wish I could be out there looking with £100K to spend.

A lot of my clients want to purchase in the 100K bracket and as such they have to look off plan, or pay a heavy prenium for getting onto one of the few decent quality finished projects here.

regards

 

[dave99]

Is this an example of shift to "ready to move in" buying !!!

I have £20k to spend on a finished apartment in Hurghada, if there is anyone out there who wants a quick sale and cash immediately PM me within the next 7 days.

This kind of request is much more common over the last 4 months or so.

I have sold units on a similar basis.
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