10 July 2007
BEIRUT: The proverb "a man's home is his castle" definitely applies to Lebanon. Despite a five-week destructive war, an open-ended political crisis and occasional assassinations, the Lebanese craving for new homes did not diminish. Most real estate brokers and bankers who spoke to The Daily Star agreed demand for small-and medium-sized apartments picked up in the past few months in some of Beirut's suburbs and regions outside the capital.
"There is keen interest in apartments with a price ranging from $70,000 to $150,000 at the most. This category is specially tailored for newly wed couples or Lebanese expatriates in the Arab Gulf who want a foothold in their homeland," said Saad Andary, the adviser to the chairman of Bank of Beirut and the Arab Countries.
He added that the state-sponsored Housing Bank is receiving dozens of applications each month. The Housing Bank provides low interest apartment loans to people with incomes ranging from LL700, 000 to LL3 million. Most of these loans are subsidized by commercial banks and in coordination with Banque du Liban.
"I was amazed when an official from the housing bank showed me big list of new house loans applicants," Andary said. But Andary admitted that the demand for averaged priced houses far exceeded luxury apartments and villas.
The real estate sector has always been viewed as a sound investment in Lebanon, a country with a very small landscape.
Due to the surge in demand, prices of small- and medium-sized apartments rose by 20 percent to 30 percent in some cases.
The appreciation of the euro currency, and the surge in the prices of building materials such is iron and cement have also contributed to a systematic increase in the prices of properties.
Victor Najjarian, general manager of the C.A.R.E. Group and responsible for, among other developments, Beirut Tower, said the Lebanese who fled the country during the war seeking jobs in the Gulf market gave the real estate market a boost.
"Over 60,000 Lebanese who traveled to the Gulf region to work as engineers or architects have apparently decided to buy houses back home and this helped the market to improve," Najjarian said.
He added that most of the buyers are seeking lower and middle end apartments in areas outside the capital.
"People are buying lands and apartments in Meten, Bekaa, and the North of the country," Najjarian added.
He stressed that the bulk of the buyers are Lebanese. "We are not getting too many requests from the Arab Gulf investors these days. But once the situations settles down I can assure you that planes loaded with Gulf nationals seeking real estate investments will start pouring in," Najjarian said.
Another real estate broker confirmed these reports.
"We have a sudden interest in low- and medium-priced apartments in Kessrouan and other mountain areas," she said, adding that some developers take this opportunity to hike prices by at least 30 percent.
However, not all real estate companies shared the upbeat view of the property market in Lebanon. Elie Harb, the general manager of Coldwell Banker real estate, said that not too many Lebanese are willing to take a risk in the real estate these days.
"But in some instances the need for an apartment becomes overwhelming especially for the newly wed couples," Harb said, adding that a demand for a market that does not exist is a false demand.
Harb believes that budgets are one of the determining factors in the real estate market in the country.
"If some one comes to me with a $100,000 budget to buy an apartment then the best choice for him is an area such as Sabtieh, a low income neighborhood," he said.
He added that the number of real estate requests fell sharply.
Harb said Coldwell Banker, which is considered one of the primary real estate firms, has several branches in Lebanon and for this reason its can assess the movement for the market very thoroughly.
"I don't buy the statistics on tourism and real estate activity because we don't have a professional data bank which discloses accurate figures," Harb said.
