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Is Egypt A Property Bubble Waiting to Burst?

  1. Yes

    6 vote(s)
    50.0%
  2. No

    6 vote(s)
    50.0%
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**when Will The Bubble Burst?**

Discussion in 'Egypt property' started by awahee123, Feb 12, 2008.

  1. awahee123

    awahee123 Banned

    Hi everyone.

    I am interested to get your thoughts on when you THINK the bubble will burst on the Egyptian property market.
    Do you think it may be the ever increasing prices that may be the reason or maybe too many new properties sitting not sold.(In the future).
    Maybe you think there is a ceiling for the prices here, that once reached may force a major slowdown in the current trend.
    It will be interesting to see what your thoughts are here.
    Please remember these are just everyones thoughts and assumptions.
     
  2. propertastic

    propertastic New Member

    You can't use the word 'bubble' to describe the Egyptian property market - not yet at least. We need to wait and see what happens in the future, but prices are still so far below any comparable market that talking about a 'bubble' just doesn't make sense.

    Now Riga, Latvia, the capital of what was the poorest country in Europe until 1 January 2007 having prices higher than Oslo, the capital of one of Europe's richest countries - now that was a bubble.

    The bubble was actually caused through ridiculously easy access to mortgages in the country - up to 105% LTV - with very little in the way of paperwork needed to secure one. This led to annual price increases of 50-60%/year.

    As we all know, foreigners currently can't get mortgages in Egypt, but it is only a matter of days/weeks/months before that changes.

    When it does, anyone with about GBP8000 in their back pocket will have the ability to buy in Egypt and that will send prices spiralling even faster than they are doing already.

    Just keep an eye on how prices compare with other developing markets such as Morocco and Turkey (even Cape Verde - now that is a market where you can start talking about a 'bubble' IMHO). Once Egypt is at similar levels to those markets, then we can start talking about 'potential bubbles'.
     
  3. propertastic

    propertastic New Member

    P.S. The only properties I see sitting around unsold are ones that there aren't a big market for - like the masses of expensive villas sitting around - those that offer poor value or ones that are poorly promoted so most people never get to hear about.

    Put a studio on the market in a decent development for under GBP20,000 and see how long it takes to sell - you're talking just a few days usually.
     
  4. WESTMIDS33

    WESTMIDS33 Banned

    Unsold properties

    Hi Nick,

    The point being made is whether the current rise in prices is because of a greater demand by Joe Public ie a genuine demand or whether prices are being pushed up to make people think that they are onto a winner and therefore starting a purchasing stampede.

    My view is that Egypt is a great country with lots of positives but some of the developments are asking for silly prices which will scare off a lot of first time investors in Egypt.

    Me, Derek and Awahee have been looking at the various developments being sold in the Red Sea area and believe that some developers need to have a reality check with their prices. A lot of these big developments are not as full as developers want us to believe. If you want to know which ones and you really dont know then please pm me and I can tell you their names. Some of these developments are almost next door to each other and yet have differences in price of upto £300 per sq metre between them.

    Me, Derek, Awahee have all purchased in the red sea area and intend on living there for years to come even after we have stopped selling.
    We do not want Egypt turning into Bulgaria where purchasers have difficulty in selling their hard earned purchases.

    That aside I do believe people will pay higher prices if and when Egyptian mortgages start to appear but the danger there will be people believing they can cover their mortgage with rental returns.....another false belief for some people on this forum.

    Regards

    Westmids33
     
  5. dave99

    dave99 New Member

     
  6. Peter Mitry

    Peter Mitry <B>Egypt Forum Founder Member</B>

    There is no bubble; whats happening in Egypt is par for the course in a developing market. However what is evident are the attempts by some Developers to force prices per m2 higher with little justification. There is a development in the Sakkala end of the new touristic centre which is being launched at 700 GBP per m2, its not beachfront and its not even the closest to the strip and yet prices are double other comparable projects. Why? It makes no sense to me and I just hope that the public vote with their feet. Unfortunately there is a section of the community who think 'if its that cheap it can't be any good, we'd better buy the more expensive one'. Well best of luck! I just hope the luck hold out when it comes time to move it on....
     
  7. awahee123

    awahee123 Banned

    I see not many agents think it is a bubble LOL.
    It's interesting to see what everyone thinks,at least Peter is honest about the current trend in high prices that is a major issue here.
    I'm sure investors will realise sooner or later they are paying too much.
    As for consistency there is plenty it's all a one way street i'm afraid,prices are consistently going up 2 to 3 times a year,one for greed two to try and push clients into signing up before price increases.
    If the current trend of price increases contine at this rate then I think you may all be surprised at the slow down.We'll see.
     
  8. awahee123

    awahee123 Banned

    Hi Guys,

    Just to clarify my post above just so I am not misunderstood,when I say at least Peter is honest about the prices I am not meaning in no way that he isn't honest about anyhting else so don't anybody think that.
    Myself and Peter have always said prices do seem to rise sharply,I suppose it comes down to that old supply and demand scenario.
     

  9. no bubble in egypt.. the chewing gum hasnt left its packet yet


    nick .. i thought albania was the poorest country in europe.....

    i loved estonia .. was over there in 2006..
     
  10. awahee123

    awahee123 Banned

    Come on people just have a say with the poll even if you don't want to put a post on here.
     
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