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Improving living standards, wealth preservation, and rental income potential are driving investments in Egypt’s second homes market. However, challenges such as regulatory hurdles related to entertainment and property registration, the depreciation of the pound, and cost inflation present obstacles, speakers at a round table discussion on the topic last week observed.
Titled ‘The Luxe Retreat: Exploring Second Home Property Investments as True Wealth Builders,’ he round table was organized by Invest-Gate with support from the Egyptian Businessmen's Association (EBA) and the Egyptian Lebanese Businessmen Association (ELBA).
The event focused on the investment potential of vacation properties, particularly along Egypt's Mediterranean and Red Sea coasts.
Raymond Ahdy, CEO of Wadi Degla Developments said the second homes market is experiencing growth as improving standards of living motivate families to invest in or purchase second homes. Local buyers and investors are attracted to this market as a means to preserve their wealth and to align with the global trend of buying second homes for rental purposes.
Mostafa Mounir, CEO of the Tourism Development Authority (TDA) identified the North Coast, Ain Sokhna, and Ras Sedr as key destinations for holiday homes. Currently, there are 104,000 hotel rooms and 103,000 residential holiday units within TDA projects.
He pointed out that the TDA periodically offers promising tourism investment opportunities to help achieve the state’s goal of continuously adding hotel units throughout Egypt.
“We need a different perspective for projects based on the specificity of each region and its features, and there is an increase in demand in attractive areas such as Marsa Alam, Dabaa and Ras El Hekma,” he said.
Nader Khozam, Chairman and CEO of Il Cazar Developments added that the North Coast is also becoming a region for semi-permanent living due to infrastructure projects like the high-speed railway. He predicted property prices in the area to increase in the next three to four years.
Hisham Shoukry, Chairman of the Real Estate Export Council highlighted the growing trend of hotel apartments, which are experiencing significant global growth. He recommended integrating hotel apartments into the hotel sector for increased profitability and attracting investment.
Akef El-Maghraby, CEO of Suez Canal Bank, highlighted the need for products that attract investment from BRICS countries. He pointed out that while Russian investors have shown interest in Egyptian second homes, current products are primarily designed to attract buyers from GCC countries.
Ora Developers Egypt CEO, Haitham Mohamed, said the significant devaluation of the Egyptian pound against the US dollar (by roughly 50 percent) has increased project costs. Additionally, land prices on the North Coast have surged, with prices per square metre jumping from EGP 1,000 to EGP 10,000, while rising costs of labor and building materials have further squeezed developer margins. Given these pressures, he said he anticipates continued price increases for North Coast hotel apartments.
Omar El-Tayebi, CEO of TLD-The Land Developers and Ibrahim El Missiri, CEO of Somabay emphasised the importance of developing more entertainment options in coastal areas to attract buyers and investors.
El Missiri called for streamlining property registration regulations and infrastructure development, including airports and schools, to support residential communities. He also noted the expansion of West Alexandria and the potential of the Ras El Hekma project to attract residents from various governorates.
(Writing by Eman Hamed; Editing by Anoop Menon)
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