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Egyptian Property Demand Boosts Further

Posted by Guenee Abragan on Mar 29, 2016 08:44 AM EDT
Egyptian Tourist Destinations Struggle After Months Of Civil Unrest more big
A small group of tourists exits a tomb in The Valley of the Kings on October 23, 2013 in Luxor, Egypt. The Valley of the Kings lies on the west bank of the Nile River, near Luxor, and is home to the world's most famous collection of Pharonic tombs, dating from Egypt's New Kingdom of 1550 - 1150 BC. The Valley houses scores of Pharonic tombs, including the fabled tombs of King Tutankhamun, King Seti I and King Ramses II. Luxor, one of Egypt's major tourist hot-spots, has struggled to attract visitors since a popular uprising overthrew former Egyptian President Hosni Mubarak in early 2011. The dip in tourist numbers is contributing directly to a rise in unemployment in the southern Egyptian city. The tourist industry has further dwindled since Egypt's first democratically elected President Mohammed Morsi was overthrown by the Egyptian Military in July, 2013. Major hotels in Luxor are reporting occupancy rates as low as 8% in recent months and many airlines have halted direct flights from cities in Europe to Luxor, further discouraging tourism to the Egyptian city famous for its archaeological sites. (Photo : Getty Images/Ed Giles)

Egyptian property boom brought good news to Hisham Naguib and his sales team at the Cairo-based real-estate company Mountain View. With units already snapped up long before they were completed, last week's evaluation of the Egyptian compound boosted demand even further.

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Naguid said that the Egyptian currency devaluation was on everybody's mind and it sent demand for real estate further off the charts. The mogul had followed the decision to start using the back door of his office to avoid crowds of home buyers, especially during launch days. He stated that even if Egyptian banks started offering 20 percent interest rates on, people will still opt for real estate.

The Egyptian property boom marked a rare bright time in an economy that had suffered since the 2011 uprising that deposed former President Hosni Mubarak. The market had slumped into the black market, tourists had stayed away since an alleged bombing brought down a Russian aircraft in the Sinai peninsula last year, and the metropolitan city outflows had left businesses starved of customers and import of raw materials, according to a report from Bloomberg.

Egypt's citizens had been acquiring property as a safe investment strategy against the growing weaker local economy. Meanwhile, authorities had begun construction in the most populated Arab areas by releasing more plots, leaving supply-sapping public property auctions in favor of a portion of developers' profits. All of that happened before the central bank decreased the value of the currency by more than 10 percent this month.

The EGX 30 Real Estate Index had increased by 22.6 percent since March 14, when the central bank devalued the currency by the most since 2003. Over the next two days, luxury developer Palm Hills Development SAE claimed to have sold 108 units at Palm Valley project west of Cairo for $55 million, according to a feature from The Daily Star.

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