Property prices to fall
Following a property boom with double digit prices over the past five years, some analysts expect developers to sell for 15 or 20 percent less.
“The property market in Lebanon has been always immune to cyclical peaks and troughs and the trend would continue upwards," has been the consensus of industry players in the past five years.
Since end of 2010, the picture has been totally dissimilar, the real estate market has cooled down and prices stabilized.
For some analysts, the falling demand mainly for residential units would definitely cut prices in the near future. In their opinion, developers could sell for 15 or 20 percent less, since they can’t wait and see for an imminent property boom.
Economist Louis Hobeika said, “Lebanon’s real estate market is currently stagnant due the domestic and recent regional turbulence, in addition to the global turmoil since 2007."
Hobeika who predicts a price correction rather than a market collapse said, “there is now an excess supply of apartments, offices and shops which is a normal circle as a result of prices upsurge.”
Lebanon’s real estate market wouldn’t stabilize unless some achievements would be undertaken according to Hobeika, such ameliorating the country’s infrastructure such roads and bridges, leading therefore to an increased demand for properties outside Beirut. Hobeika advices developers to move towards the construction of small and medium sized apartments ranging from 60 and 150 square meters, to help the Lebanese youth afford housing. The Lebanese government has to alter the rent law which is “unjust” and improve financial tools as well, as he said.
The expected drop in prices could be good news for the Lebanese population who think that buying an apartment in their homeland has become out of their reach. “Prices are now negotiable”, said Sami Saade a Lebanese resident who has been searching for an apartment for years. I was surprised to find some apartments at discounted prices, while touring a real estate exhibition.
Saade who left Paris and came back home said, “in France, we were able to find an apartment offered for sale with arranged credit facilities at 90,000 Euros, while in Lebanon, it’s sometimes difficult.”
Data from the Directorate of Real Estate revealed that the number of property sales transactions fell by 21.2 percent in the first quarter of 2011 to reach 17,373 transactions.
Recent real estate reports showed that the market has stabilized and hit as a result of a domestic and regional turbulence, and demand for high end units has also started to fall. Consequently, developers have recently started to move towards small and medium sized apartments to meet demand.
It’s important to note that Lebanon’s real estate market has sustained damages as a result of the regional turmoil. Many Lebanese emigrants, who have been the main backbone of the market in recent years, have lost their jobs and returned home.
In 2007, real estate experts declared that it was the right time to buy as prices were expected to soar. Is it now the reversed trend?
STRATEGIES & PLANS
A fundraising event, entitled Think Green, will be held by Zero Waste ACT for all its business members on September, 10,2013, at WHITE, Dora.
The Green Mind Association invited all Green Mind Award Participants, finalists, runner ups and winners to the GREEN MIND DAY on Jan-16-2013 in Beirut, to create a platform where interested Venture Capital and Potential Investors met with participants.
A green initiative launched by Ashrafieh 2020 project aims to transform Ashrafieh into a tranquil and unpolluted area.Green spaces allow residents to walk and ride bicycles.