What is the real estate index in Lebanon?

 

What is the real estate index in Lebanon?

The real estate sector in Lebanon has witnessed significant fluctuations, especially in the context of the broader financial crisis that the country is experiencing. Here are some key points:

A thriving sector amid the crisis: Despite the severe economic crisis that Lebanon is suffering from, there has been an artificial boom in the real estate sector. This rise was primarily driven by Lebanese citizens transferring their bank savings into tangible assets such as real estate, fearing potential losses due to the instability of the banking sector.

Increased prices and sales: Real estate prices have risen by about 30% since the beginning of the protests, and sales volumes have nearly tripled compared to the previous year. This increase is partly due to people buying properties they don't necessarily need, just to protect their finances.

Payment Methods and Currency Issues: Transactions often involve cashier's checks, with some sellers also requesting a portion of cash dollars. However, confidence in the local currency has diminished significantly, and there is a notable discount (up to 60%) for payments made in actual US dollars rather than “dollars” (the dollar frozen in Lebanese banks).

Future uncertainty: The value of real estate in the Lebanese market for non-local investors is uncertain. Property prices are expected to fall again, as the initial rush to invest in property was a short-term solution for many to protect their assets. The ongoing economic crisis can lead to people reselling their properties at a loss.

Impact on debts and banks: Real estate purchases contributed to reducing debts owed to banks by about 23%. The banks themselves played an important role in facilitating these real estate transactions.

Market Saturation and Long-Term Outlook: The market is approaching saturation, with a limited number of properties remaining available. As the economic crisis worsens, there is growing concern that people may not be able to liquidate their assets in the future. The real estate sector may witness a decline in the coming year as people realize the costs associated with owning unused or rented properties.