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Where are the best areas to invest in ? I am biased towards the New Administrative Capital at the moment . Admittedly , around a year ago I couldn ’ t get a feel for it or understand it . But when I visited it a few months ago and saw the amount of construction , along with projects that are very close to being delivered , I came to realize that we are going to have to move fast . There is a significant opportunity there . Looking at how New Cairo was developed and occupied over the past 20 years , I anticipate that the New Administrative Capital is going to surpass that by far . I don ’ t think Egypt has witnessed anything in the past compared to what we will see in the next 10 to 20 years in terms of property values . It is going to set a whole new bench mark in terms of a standard of living , so this is really the best time to make a purchase and benefit from it . Anyone looking to invest anywhere should visit the New Administrative Capital before thinking of any other investment at the moment .
What would you advise for long term investment ? For long term investment I would always recommend commercial real estate . Commercial property gives a better yield on the investment every year , typically between 8-12 %, before calculating capital gain as the property increases in value annually . Compared to this , residential properties typically
return somewhere between 3-5 %, with some exceptional areas like Zamalek giving a higher return . Again , it depends on the type and quality of the project the investor is putting money into .
Are market prices holding steady or volatile at present ? Although it may appear to be quite steady , the market is actually rather volatile . Developers , and even individual sellers , do not like to be seen to drop the market price . Instead , they increase the payment terms period and absorb the cost themselves , so in effect they are dropping the price indirectly to give customers an incentive to buy .
What are your tips for first time buyers ? You absolutely need the help of a professional broker . There are low grade developers out there promoting very bad investment projects and we see a lot of uninformed people chasing these projects just because the price point is low . It may seem like a saving in the short term , but if it is not going to bring rent or make a capital gain , it will not be of value in the long term . People need to be informed about the track record of the developer . That goes for commercial property in malls as well as residential . It may seem like a good idea to purchase a shop rather than rent or lease , but the catch lies in the management and maintenance of the mall once the project is sold and handed over to an ‘ owners association ’. From that point there is generally no way to uphold standards and things become a mess . When we look at the big successful malls like CFC , City Centre and the like , we see that all of the properties are leasehold , with the owning company retaining all management responsibilities . When purchasing residential properties , for personal use or as a rental investment there are important points to consider : �� You have to ask a lot of questions
�� You need to look into the legal paperwork , whether it is a unit , a purchase from an individual or a project from a developer .
�� You must hire someone to do a proper valuation of the property , especially if it is a resale . Sellers tend to overestimate the value of the property and inflate numbers to stay in a safe range . The prospective buyer should always be aware of the proper price range .
�� You should neutralize any emotional reaction as much as possible during the search and negotiation process to avoid making an impulse buy that you would regret later on . It helps to make a check list of everything you are looking for in a property , particularly if you plan to live there . You should also view a lot of options before making a move on a property purchase .