The rush to buy holiday homes in Egypt turned the sunny shores of the Red Sea into one of the fastest-growing property markets in the region, luring international buyers with sun, sea and bargain deals.
But the political turmoil gripping the country has brought activity in the sector to an abrupt halt.
"I have got 15 people this week who are still interested, but they are holding off," says Shaz Yaqoob, a consultant with Experience International, a London company specialising in foreign property investments.
During the good times, the property firm could expect five to 10 sales a month in Egypt.
Suddenly, a market that saw tourism jump by 50 per cent from 2004 to 2008 is facing an uncertain future amid the mostly anti-government protests in the country.
It was such a different story only a few months ago, with most of the international attention focusing on the Red Sea, which was just deserted beach and a sprinkling of local hotels before the boom started in the 1990s.
Once little known outside the country, Egypt's resort market quickly attracted investors and buyers who had previously looked around Spain or Italy for holiday homes. Thousands of vacationhomes soon started to spring up along the Red Sea coast.
"In the last two or three years, it really started to take off," says Jeff Dickinson, the managing director of Pioneer Property, an estate agent in Sharm el Sheikh.
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The numbers of visitors to the resort climbed 42 per cent to 2.4 million in 2008 from a year earlier, according to data from the market research company Euromonitor International. Chartered flights and the introduction of direct service by the budget airlines easyJet and Jet2.com helped to fuel demand for holiday homes.
Russia provided the greatest number of tourists to Egypt in 2009, with 1.5 million visitors, followed by the UK with 1.2 million and Germany with 1.1 million. The biggest growth that year came from the UAE and Libya, which provided 20 per cent more visitors than in 2008.
For most, the attraction was the promise of year-round sun and cheaper prices than other resorts.
A one-bedroom apartment in Sharm el Sheikh averages about UK£30,000 to £40,000 (Dh178,000 to Dh237,250).
Egypt is "extremely good value for the money," says Mona Faraj, the managing director of Insights Management Consultancy in Abu Dhabi. "You have the budget traveller, but it is also a high-end destination."
While many visitors to Egypt's Red Sea resorts know Sharm el Sheikh, Hurghada and El Gouna, new resorts have sprung up in recent years. Most are master-planned projects, offering a range of properties, from budget one-bedroom apartments to multimillion-dollar villas.
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Emaar Misr, a subsidiary of the Dubai company Emaar, is building Marassi, a huge resort development on Sidi Abdel Rahman bay near Alexandria. The US$1.7 billion (Dh6.24bn) gated resort will include an 18-hole golf course, a golf academy, hotels and Armani-designed beach-front villas.
Arabtec Egypt, a subsidiary of the UAE's largest construction company, is building Hanging Gardens, a Dh195 million project at Golf Porto Sokhna on the Red Sea. The project, which will offer more than 700 apartments, is set on a cliff face and features what is billed as Egypt's only mountaintop 18-hole championship golf course.
The north coast, only a few hours drive from Cairo, is seen as an aspiration for Cairo residents to own property, according to the consultancy DTZ. To underline the point, property values on the north coast have dropped only 5 to 10 per cent from the peak of 2008, thanks in part to the growth of domestic purchases, in addition to international sales, DTZ reported.
Compared with other countries, Egypt's property market had been remarkably resistant to the fall in prices in the global economic downturn before the country's political crisis. Investors ranked Egypt last year as the second-most attractive property market in the region, behind Saudi Arabia, according to a survey by the property services company Jones Lang LaSalle. "The large percentage of investors looking to purchase in Egypt reflects an increasing willingness to enter this buoyant real-estate sector to benefit from its potential long-term upside," the company said.
But now the picture has changed. The longer the political unrest continues, the harder it will be for the market to recover, analysts say.
Tour operators have diverted travellers from Cairo and the resort areas to other destinations.
Meanwhile, markets such as Oman, Turkey and Dubai may benefit as buyers of second homes look elsewhere.
"Certainly there will be an impact [on the resort market] in the short term," says Martin Cooper, the head of DTZ in the Middle East. "But in the medium and long term, it has the natural assets and amenities."
The market "has a loyal base", Mr Cooper says, adding, "It may take awhile, but it will come out of it."
