Large-scale projects suggest more growth than expected

The confidence many developers have in the Lebanese real estate market is certainly not inspired by the numbers. On paper 2015 and 2016 look like the two worst years since 2007, yet this year and last have seen the launch of a handful of large-scale residential projects – one of which is the largest development in the country’s history and will easily clear the $1 billion mark.

Missing metrics

The first seven months of 2016 saw slight growth (2.62 percent) in the number of real estate transactions (which include the sale of land and built property as well as inheritances) compared to the same period of 2015, according to BlomInvest Bank. Looking back a bit further, however, the situation looks more dire. Compared to the first seven months of 2014, 2013 and 2012, transactions are down by 13, 11 and 15 percent, respectively, for January-July 2016, BlomInvest reports. Additionally, 2015 ended with transactions down just over 10 percent compared with 2014. Like looking up at stars twinkling in the night sky, however, these numbers provide a hazy glimpse into the past, not a snapshot of the current market reality. Sales transactions for built property only show up in the statistics once the property is registered by its new owner, meaning all of the sales figures cited in the rest of this article are not captured in the numbers (which also means they’re impossible to independently verify).

After blazing growth in the price and sale of both land and property … between 2005 and 2010, things have since cooled off

After blazing growth in the price and sale of both land and property (or property pledged to be built) in Beirut and its environs between 2005 and 2010, things have since cooled off. Developers have been talking for years about being cautious about new investments and shrinking unit sizes to accommodate local salaries in an effort to boost sales. This hasn’t dramatically changed, especially in the old hot spot of Beirut and its immediate surroundings. Central bank stimulus money is still welcome assistance for both developers with existing stock to move and those pushed to execute construction permits under pressure of hefty extension fees. But not everyone’s in the same boat.

by Matt Nash

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