And when it comes to Egypt it really is a case of buyer beware of building standards if buying property in Egypt because boy do they vary dramatically between constructors.  The bottom line is that if you’re contemplating buying any unit in a high rise you need a structural engineer to check out construction techniques and even if you’re buying a low rise property you need to look at what’s being built around you… 

The fact of the matter is this - Egypt has a number of fault lines and has suffered direct earthquakes, earth tremors and the after shocks of quakes in the region - it’s not a question of if Egypt will have another earthquake it’s a question of when.  And while international cities in established property markets (e.g., Tokyo) regularly survive an earthquake unscathed, a city like Cairo could be catastrophically damaged by an earthquake of a relatively low magnitude. 

Not only are building standards lower than that which many of us are used to in our home countries, but they are also far less stringently observed in Egypt. 

Now, to a degree we accept that a property that is being sold for under GBP 100,000 in this day and age in a nation as stunning and enticing as Egypt is going to be of a lower construction standard than Northern European or American standards for example…but while this doesn’t matter when it comes to fixtures and fittings, it does matter when it comes to foundations, the concrete mix, the thickness of steel, the use of cross bracing and base isolation and other earthquake proof construction methods for example. 

Okay – so, as a buyer you now know you need to beware of building standards if buying investment property in Egypt – but how can you tell whether a building is well constructed or just well finished with paint and plaster covering the cracks?  Often times you can’t – not without the services of a structural engineer who can provide you with as comprehensive a structural survey as you’re willing to pay for. 

So, ‘buyer beware’ as always – and in the case of emerging markets such as Egypt, beware of construction techniques. 

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investor you have the right to own real estate and land in Egypt, but unfortunately the property registry in Egypt is out of date, incomplete and many believe only 10% of properties in Egypt are actually registered - naturally this creates a problem for the property investor.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. 

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 investors. 

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.

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.