The first three months of 2013 have seen property prices rise in Egypt's capital Cairo, but it isn’t due to an increase in levels of demand and may not bode well for the overall picture in the country.
Although values have increased by 8% in Cairo and its surrounding areas, the rises are down to developers passing on their higher construction costs to the eventual purchasers.
Of course the fallout from the ‘Arab Spring’ continues to affect the country’s economy as a whole, with tourism levels struggling to recover and foreign investors wary of the unpredictable political scene.
Add high inflation to the mix and conditions are not ideal for a boom in the property market.
However, asking prices for apartments in New Cairo have increased by 4% and now average £771.09 per square metre, and villas have performed even better there with a rise of 9%.
It is the holiday sector that remains the focus for overseas investors though, and although visitor numbers may not yet be back to previous peaks, rental yields remained stable in the capital.
Again the New Cairo area performed best with a slight rise in rents, reflecting the attraction of new style properties in areas still rich with historical and cultural significance.
Cairo's hotel occupancy rate shows a 5% increase year on year and was 51% for the more traditionally ‘off season’ months. Major transactions in the retail and commercial sectors, particularly in office developments, also point to a positive outlook.
The main worry continues to be political uncertainty matched with high inflation. The increased taxes imposed by International Monetary Fund measures mean that the government has a tough job under already difficult circumstances. The inflation levels also mean that developers and the construction trade face increasing costs over the longer time scales of major projects.
If you are considering sending money abroad to Egypt you must research the foreign exchange markets in order to get the best deal. Remember that the rates offered by banks are almost always worse than those available through a currency specialist.