Lebanon's Ppty Prices To Remain Sticky On Downside -Bank Audi |
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Tuesday, Jun 22, 2010
BEIRUT (Zawya Dow Jones)--Real estate prices in Lebanon are likely to remain sticky on the downside due to a healthy non-speculative demand coupled with an increasing land scarcity in Beirut, said a recent report.
Demand is driven by an organic growth of local households, a large, wealthy, and well-scattered diaspora of Lebanese expatriates, and a growing demand from other Arab countries for secondary lodgings in Lebanon, said Bank Audi's Lebanon Real Estate Report.
"The short-to-medium term outlook is that of a flatter price growth relative to previous years, with less room for drastic appreciation after realty prices became more in phase with their fundamental value," the bank said.
The double-digit real estate price hikes that Lebanon witnessed in recent years have contributed to bring local property prices in line with regional and global averages to a certain extent and therefore domestic real estate prices aren't overinflated compared with such benchmarks, it added.
Despite the price correction, average property prices in the Middle East and North Africa region remain 6% higher than property prices in Beirut while average global property prices are 81% higher.
Real estate prices in Lebanon are still facing a downside risk if the political or security situation deteriorates, although this deterioration is unlikely at present, Bank Audi said, adding that a prolongation of global economic sluggishness or new uncertainties in financial markets may also negatively affect foreign demand for local real estate.
By Shikrallah Nakhoul, Zawya Dow Jones, +961 1 985757, shikrallah@zawya.com
Copyright (c) 2010 Dow Jones & Co.
(END) Dow Jones Newswires
22-06-10 1156GMT
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While Bank Audi are not geniuses, I agree that there is a low probably that property prices will deteriorate, mainly due to the fact that most of the price boom, until the end of 2009, was financed by cash (equity, not debt).
Since owners are not really going to be squeezed for cash since they won't have a bank breathing down their necks, this makes it probable that Lebanon real estate will remain stable in the medium term. [Report Abuse | Email to a Friend | Reply to this Comment]