| As
a foreign investor you have the right to own real estate and
land in Egypt, but unfortunately the property registry in
Egypt is out of date, incomplete and many believe only 10%
of properties in Egypt are actually registered - naturally
this creates a problem for the property investor.
However, the majority of real estate investment
interest is focused on the main cities and resort areas in
Egypt and these are far more geared up to the international
property market. Furthermore the Egyptian government is committed
to attracting foreign investment into many sectors including
the real estate sector therefore the path is being eased for
investors all the time. This is our guide to the property
buying process in Egypt for real estate investors.
Hernando de Soto, the president of the Institute
of Liberty and Democracy, recently issued a report that explains
why so few properties are officially registered in Egypt;
according to his research the legal process to acquire permission
to build property and then officially acquire the title deed
to the land on which the property has been built requires
no less than 77 bureaucratic procedures at 31 different agencies
and it can take anywhere between 6 and 11 years. This has
ensured that only 10% of properties in Egypt are officially
registered.
If you then add to this the fact that the
property registration fee until very recently was 12% of the
property’s net value (it’s now 3%) you can see
just how expensive and time consuming following the correct
legal channels can be in Egypt and you can realize why so
few properties have been registered and have title deeds.
As stated the government of Egypt under Prime
Minister Nazif is working hard to promote investment incentives
and make things like the freehold ownership of real estate
in Egypt easier to acquire for foreign invesotrs. As the procedures
improve so the appeal of the country increases and so property
prices increase in direct relation.
An investor who buys into this emerging property
market now may well be buying into a prolonged period of growth
which is the exact appeal of Egypt from an investor’s
perspective.
A real estate investor contemplating the purchase
of undeveloped land or older, well established resale properties
will need to employ a lawyer specializing in real estate law
in Egypt to assist with any such purchase to ensure the transaction
is conducted legally and that at the end of the property buying
process the investor is the legitimate owner of the real estate
and can seek to have it registered in his name and acquire
the deeds to the real estate.
An investor requiring a mortgage to purchase
property in Egypt may like to secure this outside of the country
- alternatively mortgage law in Egypt has recently improved
and investors and foreign buyers do have access to mortgage
products in Egypt now.
However, the real estate they are seeking
to purchase has to be registered at the property registry
for the mortgage company to consider it. To be eligible for
home finance an investor will need to fund no more than 85%
of the property purchase price and be able to repay within
either 20 or 30 years.
Those considering investment property in Egypt
would be wise to employ an estate agent to assist them with
their search, negotiations and also with the property buying
process.
Once an investor’s objectives have been
identified a local estate agent can find the types of property
or land that fulfill the objectives and can make offers to
the vendor and deal with any counter offers to ensure that
a property is secured for sale to the investor.
It is usual to negotiate a property’s
selling price in Egypt - unless buying off plan. If buying
off plan the price is fixed with some extras usually negotiable
for inclusion in the asking price. Once a property has been
decided upon it is usual to pay a holding deposit that takes
the property off the open market while contracts are drawn
up.
In a country with real estate registration
issues as complex as Egypt it really is critical to have a
lawyer conduct searches and to advise on the legality of the
purchase. Even if a property investor in Egypt is buying a
brand new property from a well established developer it is
wise to take advice from an independent lawyer.
basic
Egypt information |
Overview
of Egypt for Travelers |
Typical
Buildings Places
to Invest | Investment
Advice | Facts
about Egypt | Egypt
Property Buying Process |
Egypt
Real Estate Investment Potential |
Egypt
Property Investor's Country Guide |
