Despite the long-lasting recession that has affected the tourism sector since the downing of the Russian commercial jet in October, leaders in tourism real estate sector believe that recent government efforts will stimulate the sale of vacation properties along the Red Coast to international and domestic buyers.
There is currently domestic demand to buy vacation properties outside of Cairo, specifically in Ras Sudr and the North Coast, according to an investor with the Tourism Investors Association in the Red Sea. He expects the sale of properties to increase by a maximum of 20%.
“After the recessionary period in 2015, I expect that there will be growth in sale of vacation properties in 2016, specifically within the framework of the Egyptian state’s development plans for the country,” Chairman of Tabarak Holding Ali Shorbani said.
Under auspices of the government’s development plan for the tourism real estate, there have been over 200,000 vacation properties constructed, according to statistics from the Tourism Development Authority.
Shorbani cited Egypt’s weather and the access to beaches on coast of the Mediterranean and Red Sea as primary features that would attract international buyers to the Egyptian market.
Egypt’s tourism revenue fell by $1bn in 2015, from $7.1bn in 2014 to $7.1bn in 2015.
Shorbani claims that the expected increase in sales will allow investors to see at minimum equal returns on their investments. Further, he stated that the growth in sales is dependent upon two further features. First, it is necessary for there to be new marketing channels that would promote the sale of vacation properties internationally. Second, Egypt must bolster its US dollar reserves.
The TDA is in the preliminary stages of identifying lands in Ras Sudr on which to build a yacht marina that would be connected to another marina on the western coast of the Gulf of Suez.
Shorbani expects these measures to bolster growth in Ras Sudr. The government also plans to build a new airport and and widen the road that provides access to the area, facilitating further transit. Additionally, The Ras Sudr Investors Association has adopted a development plan.
That is in addition to the developing and widening the road, beginning in executing the airport, and the comprehensive developmental plan adopted by the Ras Sudr Investors Association.
Domestic demand has centred on properties in the Red Sea, with smaller demand in Sharm El-Sheikh, according to Commercial Director at the Egyptian Resorts Company Abu Bakr Makhlouf.
Makhlouf called for a more coordinated effort by the tourism sector to appeal to buyers in the markets of Arab states.
The tourism real estate sector faces further challenges due to the foreign exchange market and the transference of real estate value into markets where the Egyptian pound is weaker.