Is Investing in Egypt's North Coast Still a Safe Bet
- Mohamed Hassan
- Aug 12
- 2 min read
Lately, there's been a lot of talk about investing in Egypt's North Coast. Some people think prices are crazy, while others believe the investment returns aren't as good as they used to be.
Let's look at the main reasons why this market is becoming a risky place to put your money.
The Myth of Crazy Rental Prices in North Coast
You might hear stories about villas renting for a million Egyptian pounds a night. But these numbers are often not true. While you might see some very high prices on certain websites, a quick check on other sites like Airbnb shows that the most expensive rentals are much lower, usually around $1,000 per night. These exaggerated stories often get spread to create buzz, but they don't reflect the real market.
2. Demand is Actually Dropping
Many people believe that demand for the North Coast is higher than ever. However, if you look at the most expensive hotels, like The Address and Vida in Marassi, you'll see they have available rooms in August, which is the busiest month. In previous years, it was almost impossible to find an open room at these hotels during peak season. This shows that demand is starting to decrease because people can't afford the high costs.
The Real Reason for High Prices
The price per square meter in dollars hasn't actually changed that much in 20 years. The real problem is the huge gap between prices and the average person's income. While a meter in Porto Marina might have cost $2,000 twenty years ago, that same amount of money is now worth much more in Egyptian pounds, making it unaffordable for most people.
A lot of investors make a big mistake. They buy a unit for a high price on an installment plan (e.g., 10 million EGP) and expect a 10% annual return on that amount. However, the real cash value of the property is likely 50% less (e.g., 5 million EGP). This means their expected 10% return is actually a 20% return on their real investment, which is almost impossible to achieve.
A vacation home is a luxury, unlike a primary residence, which is a necessity. If vacation rentals are too expensive, people can simply choose not to go on vacation. This makes the market very sensitive to high prices and puts investors at risk.
A lot of developers are building without a clear plan, which is creating a crowded market. Many of these projects also suffer from poor maintenance and lack of proper care, which hurts the area's reputation as a high-end destination.
The high-end luxury market on the North Coast (for very rich people) will probably stay strong. However, if you're a regular investor thinking about buying a unit for the middle class, be careful. Don't base your investment calculations on the installment price. Remember that a vacation is a luxury, and people will stop going if it becomes too expensive. The market is becoming very risky, and you should think carefully before investing.
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