Rising property-sale indicators in Lebanon buck global trend

Figures released by the Directorate of Real Estate indicate that the number of property-sale transactions in Lebanon and the value of such transactions witnessed an increase in 2009, bucking the trend of dwindling real-estate activity across the MENA region and the world at large. The figures were released by Bank Audi’s Weekly Monitor Monday.

“This increase comes despite of fact that for a certain period during 2009, the sector’s activity slowed down to a certain extent. A detailed look at the property sector’s activity in 2009 would show that during the first quarter of the year the sector stood firm in the face of the global crisis, with its indicators registering positive year-on-year variations,” Audi said.

But it added that during the next two quarters, indicators of the sector displayed signs of weakening, which could to a certain extent be the result of the high base recorded in the same period of 2008.

“Nevertheless, activity rebounded in the last quarter of the year, and especially during December 2009, thereby pulling up the number and value of property sales up above their record high levels registered in 2008,” Audi said.

The figures indicate that the total value of property sales in Lebanon was at LL1.875.2 trillion in the 12th month of the year, jumping by 40.8 percent when compared to the value registered in the same month of the previous year and reaching its highest level in 2009.

The number of property-sale transactions also hit a record high of 12,207 transactions, up by 27 percent year-on year.

“This means that the average value per property sale surged 10.9 percent upward in December 2009 relative to December 2008 to reach LL153.6 million, by far its highest level in 2009,” Audi said.

The yearly performance in the property market was characterized by a rise in the overall value of property sales, as well as lower rise in the number of property-sale transactions.

The number of property-sale transactions rose by 2.3 percent to reach 83,622 transactions, a yearly peak for Lebanon.

“Of particular importance is the surge of 17.6 percent in sales transactions to foreigners, which also soared high in 2009, despite the difficult [global] economic conditions, which negatively affected the purchasing power of foreign investors,” Audi said.

It added that this underscores the attractiveness of the Lebanese property market to foreign investors, who are mostly Arabs, as despite the increase of property prices in Lebanon; such prices remain rather more competitive than property prices across the Arab world.

The value of property sales reached a yearly peak of LL10.576.2 trillion in 2009, up 8.3 percent compared to 2008.

Finally, the increase in the value of property-sale transactions within the context of a lower rise in the number of such transactions has resulted in a rise in the average property-sale value in 2009 of 5.8 percent to reach LL126.5 million.

It is worth noting that Lebanon recorded over $4.3 billion in real-estate transactions in 2008 and brokers noted that the bulk of the buyers were Lebanese expatriates in the oil-rich Gulf states.

Prices of properties in Lebanon surged by more than 40 percent in the first seven months of 2009.

This trend is expected to continue in the first few months of 2010 although some brokers warn that any economic shock in Dubai and other Gulf states could diminish the appetite of investors.

– The Daily Star