10 August 2017
BEIRUT: The Lebanese seemed more inclined to invest in new properties thanks to the low interest rates on mortgages, a new survey by Byblos Bank showed.
Commenting on the results, Nassib Ghobril, chief economist and head of the economic research and analysis department at the Byblos Bank Group, said: “Accommodative policies of low interest rates on mortgages in Lebanon, the renewal of the term of Banque du Liban’s Gov. Riad Salameh that increased confidence in the stability of the currency, and relative political stability, are all factors that may have supported the near-term plans of potential buyers.”
“In fact, the index’s average monthly score in the second quarter of 2017 is still 60.1 percent lower from the peak of 131 points registered in the second quarter of 2010, and remains 52.4 percent below the annual peak of 109.8 points posted in 2010. Also, it is 15.2 percent lower than the index’s monthly trend average score of 61.7 points since the index’s inception in July 2007,” he added.
Ghobril stressed that the Lebanese will start buying houses and apartments once they see positive signs in the economy. “The demand for housing in Lebanon is primarily correlated to political stability, consumer confidence and economic activity, which continue to be at low levels and constitute a drag on demand,” he explained.
The report said that the share of residents who had plans to buy or build a residential property in Lebanon gradually decreased from 7.5 percent in December 2016 to a low of 3.4 percent in March 2017 during the first six months of the year, before improving to 7 percent in June.
“Buying a residential unit constitutes one of the most important investment decisions for the Lebanese, and the value of a house is usually the single most important nonfinancial asset for resident Lebanese,” Ghobril said.
He warned that increasing taxes and fees on the real estate sector could discourage the Lebanese to make new investments in properties in the future.
Ghobril instead advised the government to reduce the registration fees of purchased residential units.
“This would provide an incentive to prospective or hesitant buyers to save a considerable amount of money, given the very high registration fee that is equivalent to 6 percent of the price of the purchased property. It would also encourage thousands of persons who already bought residences in the past to officially register their transactions, which would increase public revenues,” he added.© Copyright The Daily Star 2017.
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