| 05 Jan 2009 |
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Global guidebook takes Lebanese real estate down a peg in terms of cost
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05 January 2009
BEIRUT: The Global Property Guide's annual report on real estate investment trends around the world indicated that Lebanon ranked in 60th place globally, up from 62nd place in 2007, and 4th among 10 markets in the Middle East & North Africa in terms of "roundtrip transaction costs" (RTCs) which reflects all costs of buying and reselling a residential property, expressed as a percentage of the property value. The report was carried by Byblos Bank's Lebanon This Week.
Such costs include registration costs, real estate agents' fees, legal fees and sales and transfer taxes. They exclude annual property taxes and capital gains taxes although they are typically paid before the property is registered.
RTCs in Lebanon rose to 11.6 percent in 2008, up from 10.7 percent in the previous year. Globally, Lebanon ranked ahead of the Brazil and Germany and came immediately behind Austria and Barbados.
Regionally, RTCs were lower in Lebanon that they are in Egypt, Morocco and Jordan, but higher than in Iran, Israel, Tunisia, the UAE, Bahrain and Oman. Jordan had the highest roundtrip transaction cost at 15.24 percent and Oman the lowest at 3.01 percent. RTCs in Lebanon were higher than the regional average of 9.03 percent.
The report offers the tools needed by foreign and non-resident investors to buy income-generating property overseas. It said only resale apartments and houses are included in the survey. The properties surveyed have to be in excellent condition, have good facilities, and have been refurbished or redecorated within the past five years. The Global Property Guide's valuation data is based on upper-end apartments in prestigious areas that appeal to foreign investors or renters. It said that figures for Beirut cover the areas of Achrafieh, the Beirut Central District, Hamra, Jnah, Ramlet al-Baida, Ras Beirut and Verdun.
Lebanon ranked in 38th place, up from 42nd place in 2007, among 72 markets globally and 6th among seven markets in the Middle East & North Africa in terms of Gross Rental Yield, which is the annual rent relative to the house price.
The Global Property Guide said the Gross Rental Yield is the return-on-investment (ROI) before taxes, maintenance fees and other costs, and is a key figure for investors. Globally, Lebanon ranked ahead of Croatia and Bermuda, and came immediately behind Slovenia and Romania. Regionally, the Gross Rental Yield in Lebanon was similar to that of Israel, but lower than Morocco, the UAE, Jordan and Egypt.
Lebanon's Gross Rental Yield was 5.13 percent, lower than 7.46 percent in 2007, and slightly lower than the regional average of 5.34 percent. Egypt had the highest gross rental yield at 12 percent, while Beirut and Tel Aviv had the lowest at 5.13 percent among the six markets where figures were available.
Lebanon's price-to-rent ratio was 19, higher than the regional average of 14.8, indicating that it takes 19 years of rent to buy a 120-square-meter apartment in the Beirut, while it takes eight years of rent, the lowest in the region, to purchase a similar apartment in Cairo.
Regionally, rent in Beirut was lower than rent in Dubai and Tel Aviv, but higher than in Amman, Marrakesh and Cairo. Beirut's rent-per-month was $1,430, lower than the regional average of $1,826 per month. Dubai had the highest rent at $3,935 per month, while rent in Cairo was the lowest in the region at $833 per month. - The Daily Star
© Copyright The Daily Star 2009.
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