Ah, Egypt. Land of the pharaohs, feluccas floating down the Nile and Sphinxes guarding pyramids. And property in Egypt is very cheap to buy. ?You can still buy one-bedroom flats in Egypt for ?15,000 and villas for under ?100,000,? explains James Hickman from Caxton FX, a foreign currency broker. ?People buy in Egypt because it's affordable. Of course it's got other things going for it too ? there's the great climate, eating out is very cheap, as is the cost of living, and it's relatively easy to get to, taking from just four hours from the UK. But mainly, it's the low prices which is attracting British buyers.?

The main property areas are Hurghada, nearby El Gouna and Sharm el Sheikh, all on the Red Sea. Not only is property in Egypt cheap, but as Tahir Ali of Egypt Revealed, the taxes are forgiving on the wallet, too. ?There is no capital gains tax and no inheritance tax,? says Hickman. ?Local taxes and registration fees are nominal, though they can vary in different areas.? Buyers should budget for a purchase tax of three per cent, legal fees of one per cent, and estate agent fees of two to three per cent.

?Capital growth is currently 25 per cent and rental yields of around five per cent are achievable in good locations ? this, in our opinion, will rise as the government's drive to increase visitor numbers develops steam,? he says.

There are no legal restrictions to buying and another significant feather to Egypt's bow is that there is a lot of coastline still to be developed, and it is possible to buy property with sea views that won't cost buyers any of their limbs. A two-bedroom flat rents for roughly ?300 per week, according to Lance Nelson from Jet2Let, a one-bedroom for around ?200 and a three-bedroom flat can return ?500 per week.

The downsides are that a lot of the hype surrounding the Egypt market is based on anticipation. ?It's a very new market? points out Richard Cotton, of Cluttons, which is selling Port Ghalib, a newly-launched golf development found next to Marsa Alam international airport, in the south of Egypt. ?There's not a lot of unfinished product, and I think, to a certain extent, it's a bit of an unknown quantity at the moment. Some of our buyers are waiting to see a few developments up and running to see what the standard will be.?

Even a quick Google search will show you concerns over build quality in the country. ?Poor quality of build is not uncommon, but it is improving to cater to foreigners? expectations? says Tahir Ali, who recommends buying from a reputable agent who is dealing with experienced European and British developers.

?In a similar manner to Bulgaria, I don't think the early developments will see the highest quality of build,? adds James Hickman. ?But the involvement of big development companies will see this problem overcome as they will bring with them higher standards. The best way of avoiding this problem is to check the track record of the developer you are buying from if you're buying off-plan. Go to another development built by the developer and see for yourself the standard of their work.?

Hickman believes Egypt has suddenly become a more popular place to consider buying because fears of terrorism are subsiding. He says: ?Until fairly recently, fears of the security of the country scared people off, as there had been bombs in both Hurghada and Sharm el Sheikh, two of the most popular tourist areas in the country. That was a few years ago now, and, speaking to buyers, I have the perception that people feel things have calmed down since then ? and affordability perhaps has overcome such concerns.?

While property is cheap now, the government has plans to move the country's property more upmarket and generally attract a wealthier type of tourist and property buyer. Zoheir Garana, the Egyptian Minister of Tourism, has said his aim is to attract 14 million tourists a year to the country by 2011, and to attract high spenders. Key to the ministry's new expansion plans is the establishment of big resort-style developments on Egypt's coastlines, offering luxury accommodation, residential property, marinas for private yachts, spas and golf courses.

Big-name developers clearly have confidence in the long-term stability of the country and there are some monster developments in the pipeline, some which are half built or seeing early phases completed. Perhaps most notable is the Serrenia resort, which, aiming to prove that there is a market for high-end property in the country, has hired Norman Foster as the architect. Found in Sahl Hasheesh bay, 12 miles south of Hurghada, prices start at around ?200,000 and go up to ?15 million for its ?palaces?. Completion date for the project is estimated to be 2010. Another notable development is DAMAC's Gamsha Bay, which will cover a staggering 320 million square feet, and incorporate over 55,000 residential and retail units. Prices have yet to be announced. Then there's Sahl Hasheesh, south of Hurghada, a development owned by the Egyptian Resort Company (ERC), with a marina and at least three 18-hole golf courses, with prices starting at around ?60,000 and rising to ?500,000.

Hussain Sajwani, Chief Executive of DAMAC Holding, parent of DAMAC Properties, is bullish about the future of the country: "Egypt is blessed with a number of factors such as the natural beauty of its coastlines and easy access to international markets that will help position it as one of the top countries to attract overseas home owners. With the Egyptian government's absolute commitment to economic growth and stability and the country's international visitors ever increasing, those buying at developments such as Gamsha Bay are set to profit substantially from their property investment decision over the medium term."

So, property in Egypt is cheap at the moment, but if developers, agents and the Egyptian government have their way, it won't be for much longer. ?Property prices are rising steadily, with a one-bedroom marina apartment in El Gouna costing 100 per cent more than it did two years ago,? says Mark O'Sullivan from Currencies Direct. ?Returns are good, but as with any emerging market not guaranteed ? although developers will, of course, tell you otherwise. Egypt is a fledgling market, and with this does come the promise of growth but also a lack of regulation and no guarantees that your developer won't go under. This is where a good solicitor is worth his weight in Egyptian gold?.