The real estate market in Lebanon is definitely not in its best condition currently. It’s taken quite a hit in the past few years. A multitude of factors has influenced this country and its real estate market is currently in the state of a slim demand while there is a lot of supply. There are many reasons for this. The market was in decline for a few years now. Much more was being built than it was necessary, so the supply exceeded demand quite a bit. And, of course, inflation is a serious problem too.
Real estate market in Lebanon
In general, the problem is not in the real estate market for itself, but in the country. Not many sectors managed to keep their heads above the water in Lebanon’s struggling economy, but this one did. People working in real estate continued building but the rise in demand never occurred. The question of what’s holding the buyers back was raised.
As things usually are whit things like this, you can not point a finger to one specific reason. In truth, it is a combination of a few factors. Political tensions and the economic crisis are seen as the biggest problems currently. Also, high unemployment rates mean that this market can’t hold itself up with local purchases only. All of this led to lower building prices, so in reality, you can buy a lot of property for not that much money in Lebanon. So if you’re thinking about buying a house overseas, you should look into this.
If we look at the list of property prices by regions we can see that prices went down quite a bit.
- In Beirut, which is the home of the most expensive houses and buildings in Lebanon, prices fell about 7% in the last few months.
- When it comes to the district of Metn, property prices fell by 11%.
- In Baabda, the fall is around 7% also.
- However, in Kesserwan prices rose by 10%.
Foreign demand in Lebanon
As you probably figured by now, the real estate market in Lebanon is not a stable one. In 2018 sales to foreigners fell by 11% which was an indication of declined interest. However, in 2019 we saw a slight rise in sales to foreigners. The foreign homebuyers represented about 2.5% of total property transactions which is not bad at all.
Foreign ownership of real estate property is allowed in Lebanon and foreigners can buy up to 3,000 square meters of land. If you want to buy more than this, you’ll need special permission from a Council of Ministers. Another thing is that foreigners can buy only up to 3% of the total land area in this country, but when it comes to Beirut, this number goes up to 10%.
Look outside Beirut
If you are interested in buying a property in Lebanon, we would strongly suggest looking outside Beirut. The thing is that the prices in this city are exceptionally high. So much actually that they’re about four times the national average. So the people looking into Lebanon’s real estate market started moving out from Beirut.
Professionals from bfslebanon.com state that in nearby areas such as Baabda, Metn, and Kesserwan you can find housing of similar quality for a much lower price. And that is the reason why these areas accounted for about 50% of total property sales in 2019.
Buying in these regions, however, doesn’t mean that you will lose in the long term. Lebanon’s economy strongly relies on tourism, and these places are pretty much new hotspots. Over two million people come here every year, and that number seems to be rising.
Falling rental yields are another risk
Although there aren’t many fraudulent real estate companies here, gross rental yields in Beirut have reportedly been falling. Nowadays they range from around 3.5% to 4.5%, which is significantly lower than 10% from about six years ago. If you want to rent your properties in Lebanon in the next years, we suggest you buy a few smaller ones instead of one large one. The thing with this is that lager apartments in Beirut have lower yields, so you’d be better going for quantity.
You can expect to get anywhere from $2,000 for a 150 square meters apartment, to $5,000 for a 400 square meters one in Beirut. This is actually a low rental price. The overall rents are lowered by the survival of many old contracts made before 1992. This created a class of sitting tenants that all pay incredibly low rents. It’s a burning problem with the real estate market in Lebanon currently. However, all the contracts made after 1992 are not affected. These ones are equally balanced between the landlord and the tenant.
Real estate market in Lebanon – What to buy in 2020
Although the big building boom occurred in Lebanon between 2008 and 2010, and construction activities are not as high as they were, some residential complexes show signs of major developments. Yes, your process will be quite different than buying an apartment in Dubai, but it can pay off really easy.
Abdel Wahab 618
This is a luxury residential complex that consists of two towers, and three other buildings. It is located in Achrafieh in Beirut and it is 65,000 square meters property. You can buy an apartment there anywhere from around $4000 per square meter. And the sizes of flats are between 300 and 500 square meters.
When you buy a property here, you also get a look at the 3,000 square meters of greenery and landscape. Apart from that, you get access to a gym, swimming pool, and a health club.
B11 Beirut
This is a relatively new development that was launched in 2016 by the Arabian Construction Company. It features two low rise buildings alongside two medium-rise blocks of apartments. It tends to be pretty modern and it is located in Downtown Beirut. Architect in this project was a German named Axes Schultes.
Dreamville
If you are interested in the real estate market in Lebanon enough to look outside Beirut, we would bring to your attention Dreamville. It is also launched in 2016 but by the HEC Holding. It is supposed to be a gated community in Metn, and it will reportedly have 176 apartments in 19 buildings. You can buy an apartment of size anywhere from 65 to 320 square meters, overlooking Beirut, or the Mediterranean Sea.
