How to buy real estate in Egypt: steps and pitfalls

Cottage on the Red Sea coast: details on purchasing property and obtaining a residence visa in Egypt

The Red Sea, famous for its warm waters and rich underwater diversity, as well as its golden beaches and historical landmarks, is becoming an increasingly attractive destination for foreign nationals. This applies to both tourists and those looking to invest in real estate.Housing pricesIn this region, things unexpectedly remain quite democratic.

Real estate in Hurghada

For example, inHurghadaYou can find the most budget-friendly housing options. Studios of about 65 square meters or one-bedroom apartments on the first line cost an average of $50,000 to $60,000. Given the current market conditions, it might be possible to find a small apartment for $15,000 to $20,000.

The situation in Sharm El Sheikh

InSharm El SheikhThe situation is different: there are few new buildings here, which is why housing prices are correspondingly higher. The minimum cost of properties in this area starts from $25,000 to $30,000.

Rules for Foreigners Owning Real Estate

It is important to consider thatrules of property ownershipFor foreigners, there are differences in popular resort areas.

• In Hurghada, there is an opportunity for full ownership (freehold) of apartments.
• In contrast, in Sharm El Sheikh and on the Sinai Peninsula, foreigners can only access long-term leases, which are granted for a period of 25 to 90 years with an option for renewal.

Who are the buyers of real estate?

According to realtors, amongpotential buyersthe most commonly encountered citizens:

• United Kingdom
• Germany
• CIS countries
• Czech Republic
• Slovakia

Many of them dream of having their own house by the sea, where they can go on vacation and rent it out in between. Also, quite a few Europeans are making the decision to...movingfor permanent residence, especially among retirees who choose the favorable climate of the southern coast for year-round living.

The process of buying real estate

When purchasing real estate in Egypt, the process is quite simple: foreigners can buy apartments both from developers and private individuals, requiring only a foreign passport and the necessary funds.

During the purchasing process, after selecting the suitable option, it is necessary to:

• Fill out the reservation form.
• Make a deposit that can range from $1,000 to 10% of the final cost of the property.
• Sign a sales contract drafted in two languages: Arabic and the buyer's language.
• After signing the contract, make the final payment, which most often occurs electronically.

It is worth mentioning that in recent months, citizens of Russia have faced certain difficulties withmoney transfersfrom Russian banks, however, most transactions are still carried out successfully.

Investing in real estate in Egypt attracts many, as it is a country where you can find the perfect seaside property at reasonable prices.

Terms of interest-free installment payment

In most cases, construction companies offer the option of interest-free installment payments until the completion of the residential complex, sometimes even for a longer period that can last up to five years. This option is very attractive for buyers, as they get the opportunity to move into their apartment or rent it out while simultaneously repaying their debt to the developer. This method is a convenient and beneficial option for many clients.

Purchase on the secondary market

As for the autonomous market, the conditions are completely different: buyers need to make full payment upfront, with no option for long-term installments. It's also worth noting that mortgage loans for foreign citizens are not available in Egypt, which creates additional difficulties for non-residents planning to purchase real estate.

General power of attorney and ownership rights

After the cost of the apartment or house is fully paid, the seller provides the buyer with a power of attorney, known as“tauquil”This document is needed to record ownership rights to the property. Although the official sales contract is the key document, without it...“Taukilya”The further resale of this property will become almost impossible. Without this certificate, the buyer will have to contact the developer again to resolve issues related to the sale.

Legal assistance

When purchasing real estate, many clients require legal advice. In the case of transactions in the secondary market, the cost of legal services typically starts at $300, while for the primary market, it is often more affordable due to standardized agreements for groups of properties. However, one should never skimp on legal assistance, as potential issues with document processing can lead to significant financial losses in the future.

Commissions and re-registration

In Sharm El Sheikh, when purchasing real estate, a commission of 2.5% must be paid to the agency, whereas in Hurghada, such expenses are most often borne by the seller. At the final stage of the transaction, the new apartment owner is advised to budget around $200 for the re-registration of water and electricity meters, which should also be taken into account in the calculations.

Property tax

Property owners are required to pay an annual property tax, the amount of which varies depending on the region and the cadastral valuation of the property, and is approximately $25 per year. However, it is important to understand that the real estate market in Egypt is still quite closed, as there is no unified registry of property owners in the country. This creates a risk of encountering unscrupulous developers.

Steps to improve the situation

Although there are certain risks, the Egyptian authorities are actively working to improve the situation, aiming to create safe and comfortable conditions for investors, both local and foreign. At the end of June 2022, a bill was introduced that requires construction companies to open separate accounts for different projects and to provide annual and semi-annual reports on their activities.

Moreover, during the pandemic, when all construction and renovation work was suspended for eight months, government regulatory authorities conducted a large-scale inspection of developers, which also contributes to increasing transparency in this sector.

Positive trends in the real estate market

The situation in the real estate sector continues to show positive trends; however, foreign buyers should approach transactions with a certain degree of caution.

Risk assessment when buying a home

When purchasing ready-made housing, it is extremely important to carefully consider all possible risks that may be hidden behind the attractive facades of the buildings.

Conclusion on the prospects of acquiring real estate in Egypt

In concluding the discussion about the prospects of purchasing real estate in Egypt, I want to emphasize that this market truly offers unique opportunities for foreigners. Not only because of the affordable prices, but also due to the wonderful climate that allows for enjoying life in warm regions year-round, Egypt attracts buyers from all over the world.

Purchase procedure

The process of purchasing real estate may seem complicated, however, as I have found out, it becomes quite clear when considering the necessary steps. The options for installment payments, favorable conditions for foreign investors, and the ability to quickly arrange legal documents make this process quite comfortable, especially for those who plan to use the acquired property as a vacation spot or for regular trips.

Risks and precautions

Nevertheless, I cannot help but mention the risks. The lack of market transparency and the absence of a unified registry of owners raise certain concerns. That is why I strongly recommend that future buyers engage qualified lawyers who can help avoid many issues.pitfallsand guarantee the legality of the transaction. It is important to stay informed about all the new developments and changes in legislation that may affect the purchasing process.

Market trends

Moreover, it is worth paying attention to the trends and preferences of other buyers. Every year, the number of people looking for their place by the sea not only for vacation but also for permanent residence is growing. As one of those seekers, I truly believe that Egypt has every chance of becoming a key destination on the real estate map for many who wish to improve their quality of life.

Final thoughts

Ultimately, if you are considering the possibility of investing in real estate in Egypt, it could not only be a successful financial investment but also the beginning of a new chapter in your life, filled with vibrant experiences and fresh impressions. Don't miss the chance to be a part of this sunny paradise!