Lebanon's building market shrinks
Instability blamed for drop in construction permits and property sales
The property and construction market in Lebanon is continuing to be affected by regional instability despite an increase in demand from wealthy Syrian nationals.
According to the Daily Star newspaper, the number of property sales recorded during the first two months dropped by almost 19% to 8,547 (2012: 10,543).
The total value of properties sold also dropped by over 21% to $920m ($1.16bn).
The pipeline of new apartments is also set to decline as building work is slowing. Construction permits were issued for almost 1.4m m2 of land during January and February, which is a 21% drop on the 1.9m m2 for which permits were granted in the same period last year.
Nicolas Mehchy, regional sales manager of estate agency Plus Properties, said: “Demand is well below supply in the real estate market right now, but prices continue to remain high. This is why you have such a sizable decline in the number of transactions.”
The drop in the value of properties sold is also due to the fact that buyers are trading down from luxury apartments to smaller, more affordable properties. Builders are also shifting their focus so that new developments contain smaller units.
“Small apartments are definitely the easiest to sell these days,” he added.
Aline Chiha of JSK Real Estate told the newspaper that there was no demand for properties in the $500,000-plus range.