Lebanon RealEstateReport
A RESILIENT ARENA AMID A REGIONAL REAL ESTATE TURMOIL
The real estate sector in Lebanon, an open and liberal market, has persistently shown resilience to
adverse political and security conditions on the local scene as well as adverse external factors at the
regional and global levels. Over the past five years, real estate sales value and construction permits
posted average growth per annum of 17.6% and 12.6%, respectively.
Demand has been quasi-continuous, stemming from local residents growing steadily in number,
July
expatriates returning to their home country either permanently or for visiting purposes, and
foreigners, mainly Arab nationals, that have been increasingly investing in the local realty market.
2009
Real estate prices consequently witnessed a steady and gradual appreciation (three-year average
estimated at 25%-30% per annum by Ramco Real Estate Advisers), and shot up all throughout last
year (average of 50%-60%) especially post-Doha agreement.
The sector has been relatively shielded from the spillovers of the global financial crisis that hit peer
Arab realty markets. First five months 2009 figures show that real estate sales transactions in
Lebanon almost stabilized, while construction permits registered a satisfactory 4.3% yearly rise.
Real estate prices are almost sticky on the downside, posting a comparatively moderate 10%-15%
decline in the utmost since the onset of the crisis that brought local realty closer to appealing value.
The comparative resilience of the local realty market to the crisis is mostly owed to the persistence
of demand drivers post-crisis showing genuine needs for realty, and stringent regulations related to
bank lending to the sector limiting the impact of speculators on market activity, within the context
of the absence of a real estate bubble in the country such as the one witnessed in prime Gulf
markets.
A likely rise in post-election demand amid favorable political and security conditions would ensure
a more balanced equilibrium between supply and demand in coming months. Demand could
progressively resume an upward trajectory and increase the attractiveness and visibility of Lebanese
real estate in the period ahead.
SWOT Analysis
Strengths
Weaknesses
• Open and liberal market
• Volatile political conditions burdensome for the sector
• Activity governed by real needs rather than pure speculation
• Erratic fluctuations in construction and raw materials prices
• Property prices relatively sticky on the downside
Opportunities
Threats
• Growing return of expatriates to boost demand
• Domestic political stalemate, occasional security drifts could slow
• All-time low borrowing costs and continuing availability of bank
down demand
financing
• Liquidity squeeze in region might affect Arab demand for
• Comparatively low prices on a regional and emerging market scale Lebanese realty
