The Red Sea; a Real Estate Paradise
Real estate is a complex industry, where many aspects come into play. One of the most important aspects of real estate is the location. The market, and the way it functions, differ depending on the place. That is why it was imperative to talk to Maryana Metry from RE / MAX RELAX in Hurghada, to find out more about the real estate industry there, and how RE / MAX can add to the market in such a fascinating destination.
There was a drop in the real estate market in Hurghada. Why did it happen? And is it over or not yet
After the revolution, some hotels could not handle the drop in tourists’ numbers with the low occupancy, so they laid off a large number of their workforce who reside in the Red Sea Governorate. This resulted in a big drop in the Hurghada and Red Sea population. Subsequently, the demand on residential units dropped. Things started to get better, until the Russian plane incident; this affected us badly. Which caused the loss of a huge sector of the foreign guests who live in Hurghada; as some guests bought houses in Hurghada to live in for six months per year, or as a retirement second home. This reflected on us in terms of sales. It was harder to overcome than the results of the revolution. This year things started to get better, when the flight ban was lifted and even they increased their seats capacity, hence it had a very positive impact on the number of the tourists from different countries. They managed to support the hotels and started investing in the real estate, too. With the improvement of the hotel occupancy and things becoming more stable, this gave people a sense of security, and made them feel like they can safely invest in this country with a good return. So, we started selling more. And as hotels started to run a good occupancy which enabled many job opportunities in all the departments, suppliers and different sectors, where by return the sale and the rental services started to grow. Also, after the currency floating exchange rates, foreigners now have perfect opportunities for investment that weren’ t there before. This created new opportunities for us to sell, and now we have a good sector of the foreign markets to work with.
What do you do differently depending on this market fluctuation
Our career in real estate in such a destination is related directly to tourism. Any drop in tourism quickly affects real estate. If someone is making a deposit for a unit and they are about to buy it, a small piece of news might make them rethink taking their decision. We work directly on this, we spend more on the marketing and campaigns. When these drops happen, they usually affect a specific market, so we start directing our marketing to the other markets. For example, when there is a drop related to the foreign market, the local market can support us; Egyptians start buying when the prices drop and become affordable to them. If the Russian market is affected, we start looking into increasing our share of the English or German markets. We contact lots of places online with live pictures, showing what life is like in Hurghada with its safety and beautiful weather. We market the destination itself, we’ re selling a destination. Another special aspect of Hurghada is that if someone wants to invest here by buying an apartment and renting it out, they will find that Hurghada is working all year long unlike the North Coast for example.
What do you focus on more when it comes to real estate: short-term rentals or longterm rentals and sales? And do you focus more on the Egyptian or the Foreign market?
When it comes to long term, the foreign market isn’ t always very active, and it is not our main target. This is more related to the local market. Short term, however, goes for both. When hotels start raising their prices because their priority is to host foreign guests, and those prices become too expensive for Egyptians, this is when Egyptians start heading for short term rentals. As for short term rentals for foreigners, we do that as well, but we face the hotels’ strong
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