The Global Financial Crisis may have devastated real estate prices in Dubai, causing a 48% fall just this last year, as well as causing serious drops in other countries, but one place that is seeing increased prices is Lebanon.
The head of the Order of Engineers in Lebanon has predicted a growth in the real estate sector of 10% to 15% per year until 2013. The reason for this is the influx of Lebanese expats and other Arab investors seeking a piece of Lebanese real estate. Many of these expatriate Lebanese had spent years in other Gulf states, Dubai especially, but many have now moved from the UAE to Qatar and Saudi Arabia, where job prospects are now better, or back to their home country to purchase a property there.
In 2008, transactions accounted for $4.3 billion dollars in Lebanon property, with most of the action taking place on small- to medium-sized properties in Beirut or Mount Lebanon. However, real estate brokers are not too surprised by the effect of this expat activity given the small size of the country compared to the population. If land and property is at a premium, prices can be significantly affected by a relatively small shift in the population either way, or just by the actions of speculative investors.
Property prices per square metre in Beirut are twice the national average, at $1,600, and most sales take place on properties between 150 and 300 square meters. It is also projected that the market will be given a further boost by recent incentives given to commercial banks by the Lebanese Central Bank to offer house loans at very competitive rates.
Property transactions in August 2009 are up 3.9% on July figures, and 28.9% on June figures, although these are still 2.3% down on figures for August 2008 when the boom was at its peak. In the year from August 2008 to August 2009, the average property price rose by just 0.1%. Taken over the past year, the Lebanese real estate market is actually in negative territory, but it is still performing a quite remarkable feat given the global crisis of the past eighteen months, and the fact that very few countries are expecting any great improvement to happen any time soon. In many developed countries around the world, most notably the US and the UK, real estate prices have fallen by 20% to 30% since the crisis began. For these countries to be looking at the Lebanese figures would bring enormous elation.