Cannes: The return of European bank bonuses will breathe life into the world's catatonic market for overseas residential investment in 2010, the developer behind Egypt's biggest building project said.
Peter Riddoch, chief executive of Port Ghalib Resort Co, a unit of Kuwaiti construction conglomerate M.A. Kharafi Group, said bankers were among those reviving buy-to-let plans as job security improved, with Egypt flying high on their wish lists.
"The market for second luxury homes overseas was lying still for a while but it is now moving forward quite nicely again," Riddoch said in an interview at the MIPIM property trade fair.
After more than a year of job cuts and salary freezes, many European and US banks dished out bonuses again in early 2010 in moves likely to boost global sales of holiday homes. With the traditional hotspots still very much in the doldrums, Riddoch said savvy investors were now looking to Egypt, where tourism growth hit a five-year high of 43 per cent year-on-year in January and February.
GDP growth
"China is showing 10 per cent growth in GDP, India is at 6.8 per cent, Europe and the US are negative but Egypt is showing 5.8 per cent growth. It's right up there with the big guns but people are only starting to realise that potential," he said.
While poor transparency and uncertain rental prospects in other global residential investment markets had inspired some foreign investors to look at Egypt, Riddoch said the market "could stand on its own two feet".
The opportunity to make money from property ownership in integrated resort communities like Port Ghalib was not lost on Egypt's emerging middle class, many of whom had got in early, sold and recycled the proceeds into a new crop of investments. That aside, Riddoch said the Egyptian government was already seeing the fruits of its efforts to make foreign real estate investment more straightforward and transparent in recognition of the benefits to its economy.
"Other than the Sinai which is 99-year leasehold, freehold foreign ownership has always been permissible. There are limits on the numbers of homes an overseas individual can own but companies can own as many as they want," he said, explaining an uptick in interest for bulk-buying at Port Ghalib.
Key interest rates maintained
The Central Bank of Egypt said on Thursday it kept its key interest rates unchanged for the fourth straight time.
The lending rate was held at 9.75 per cent, the deposit rate at 8.25 per cent and the discount rate at 8.5 per cent.
Egypt's urban consumer price index, or urban inflation, declined to 12.8 per cent in February from 13.6 per cent in January, the Egyptian government said last week.
