DESPITE CERTAIN COVID MYTHS...
EL GOUNA IS STILL PROVING TO BE A REAL ESTATE LEGEND
Covid 19 in the Red Sea
Whilst the Covid-19 situation in Cairo and other densely populated areas of Egypt is still giving grave cause for concern, the Red Sea Governorate has been rigorous in it’s lockdown rules. Exercising very strict controls on hotels, beaches, clubs and restaurants. As well as banning all foreigners from entry between March 15th until July 1st. Movement of Egyptians from other parts of the country to the Red sea has also been strictly controlled. With curfews, road blocks, on the spot testing, enforcement of wearing face masks when driving and in all public spaces. Over the busy Easter and Eid feasts cars where turned away if they did not own a property in the region. The result has been that there have been less than 1000 infections in the region. Whilst the death toll is less than 20 people.
And in El Gouna!
For El Gouna; the Covid crisis and the national lockdown, sparked a new market of interest from wealthy Cairo residents who had previously had rented in El Gouna. When they discovered that as renters they might not have access to the resort, they began to realise that ownership has it’s privileges. As a result, all the agents across the board started to receive phone call after phone call for “ready” properties with good aspects with budgets from 500,000 USD to 1m USD. It was ‘Really quite eery’ said one broker. 'Here we were in a national pandemic doing 4 or 5 viewings per day all masked and gloved up. It was almost quite comical showing houses. Also quite stressful, as it is surprisingly hard to do all the necessary talking behind a mask as well as constantly keeping an eye out not to touch anything.’
The net worth that came to El Gouna over the various feasts was staggering. At one stage, due to the 4pm curfew for sea craft, there were over 200 super yachts queuing as if in a rush hour to return to the marina. It was quite spectacular! Clearly, for many, El Gouna has taken on a different perspective in their minds. It is no longer a place just to visit for a casual weekend. It is now for many ‘home’. The upside of the Covid-19 tragedy for El Gouna is that many owners realised that they could actually live in El Gouna. For the town, this will be a hugely important change onwards as it will even out the occupancy periods and keep Gouna busy all year round. Even the entire Sawiris family, all three brothers with all their kids and cousins , made El Gouna their home during the entire period. Considering they could have gone to almost anywhere in the world with their jets, super yachts and plethora of global properties, that was quite a mark of dignified respect for the place. There were no foreigners in the hotels during the lockdown period but to be honest, no one really even noticed their absence.
Red Sea Re-Opens
As from July 1st, the international airport at Hurghada re-opened to international traffic. However, due to the airline crisis in Europe, the market for the Red Sea will have to change. One of the criticisms of the Red Sea has always been the fact that it has mainly been marketed to a low yield audience. Airlines that normally flew to the Red Sea have been devastated financially. So for a while ahead, it will be only the more expensive scheduled carriers such as Egypt Air and Turkish Airlines that will service Hurghada. Easy Jet will resume flights but the fares are going to be almost double. This, however, from a real estate point of view could not be better news as the higher fare guests are far more likely to purchase real estate. Also, in the past, some investors were put off by the low class of tourist that they met in the airport.
Why Buy in El Gouna
For climatic reasons, the fourth quarter of 2020 might prove to be a little “boom” for El Gouna from Europeans. Many people will not have been able to have had a holiday in the Mediterranean in the summer. Some due to work commitments after lockdown and others due to quarantine travel restrictions.
The best time to visit the Red Sea for Europeans is Sept- December. There will be a significant interest in the area over that period.
Finally; last but by no means least, it is becoming rapidly apparent that there will be a strong European tax reason why El Gouna real estate proves to be very favourable. The likes of Spain, Italy and France have also said that they are going to pile on the taxes on second home owner properties in order to pay for local cost of Covid-19. Demanding percentages of global net worth for all owners, increasing local taxation up to 1000% in some places. Owning a property in El Gouna, with a minimal annual property tax and easy visa residency, will be serious less taxing onward going. Just that fact alone brings always brings back the real estate crowds.
To find out more about the real estate available for sale in El Gouna, please contact MEPM Managing Director Edward Hill.