Investors continue to snap up properties in Lebanon despite global economic recession
Growth expected to remain at 10-15 percent each year until 2013

By Osama Habib - Daily Star
The head of the Orders of Engineers in Lebanon on Thursday projected a growth in the real-estate sector of 10 to 15 percent each year until 2013. “We already have a growth of nine percent in the first eight months of 2009 and we expect this growth to continue,” Bilal Abdallah Alayeli told The Daily Star. The real-estate sector in Lebanon has lured Lebanese expatriates and Arab investors alike, despite the global economic crisis which has severely affected Dubai and other oil wealthy states in the region.

The value of property transactions in 2008 reached more than $4.3 billion and most of the buyers are Lebanese expatriates working in Gulf states.

Alayeli said that contrary to the general perception, Lebanese engineers who worked in the UAE have either moved to Qatar and Saudi Arabia.

“The jobs prospects in Qatar and Saudi Arabia are much better than Dubai these days as thousands of Lebanese engineers thought their fortune in other Gulf states,” he said.

Real-estate brokers noticed that most of the flats that are sold in Beirut and Mount Lebanon are small to medium in size.

They also noted that the real-estate boom in Lebanon is only natural because the county’s landscape is very small compared to the population.

“Imagine if 10 percent of Lebanese expatriates in Europe and the United States decided to come back to settle here. The prices of properties will go crazy,” one broker said.

The price of a square meter of built up property in Beirut starts from $1,600, while the cost outside Beirut is close to $800.

Alayeli said that most of the apartments that are sold range between 150 square meters to 300 square meters.

He added that the demand for apartments will likely rise after the Central Bank gave incentives to commercial banks to increase house loans at very competitive rates. Banks are offering 20- to 30-year housing loans at interest rates that do not exceed 5.9 percent.

Figures released by the Directorate of Real Estate, which were published by Bank Audi’s Weekly Monitor, indicate that transactions of property sales reached 7,740 operations during August, up by 3.9 percent relative to July 2009, 28.9 percent relative to June 2009, and reaching their highest value in 2009, so far.

But this figure is still 2.3 percent lower than the number of sales operations during August 2008, as back then the real-estate boom was at its peak.

“As such, the year-to-date variation in property sales transactions is still in the negative territory in the first eight months of the year, reaching 3.4 percent, with property sales transactions totaling 48,225 during the said period,” Bank Audi said.

The total value of property sales in Lebanon in the eighth month of the year stood at LL957.843 billion, down by 2.5 percent year-on-year, yet peaking in 2009, so far.

Consequently, the average value per property sale in August 2009 went up by a trivial 0.1 percent year-on-year.

The year-to-date variation in the value of property sales remained in negative territory, bearing in mind that over the past four months, this decline has been gradually contracting to reach -3.1 percent in the first eight months of 2009.

“Such a decline is very close to the yearly decline in the number of property sales and thus the average value per property sale transaction increased by a trivial 0.3 percent in the first eight months of 2009 relative to the same eight months of 2008. Total value of property sales transactions reached LL5.612.5 trillion in the first eight months of the year, while the average value per property transaction reached LL116.4 billion, during the period,” Audi said.