FOREIGNERS SHY AWAY FROM LEBANON
Stock of unsold luxury apartments rises
In addition to subdued demand, the shift towards smaller, more affordable residential units was further emphasised by the lack of foreign investors, whose purchasing power usually surpasses that of locals. Foreign investors, consisting primarily of wealthy businessmen from the Gulf countries, continued to shy away from the Lebanese market in 2014. The number of real estate transactions by foreigners accounted for only 1.5 percent of the total real estate deals in the first nine months of 2014, compared to 1.8 percent in the same period of 2013 and 2012.
Foreigners finalised 795 real estate transactions in the first nine months of 2014, down 12 percent from 903 deals during the same period in 2013. The number of sales transactions to foreigners fell by 8.3 percent in 2013.
The developers that Ekaruna magazine interviewed unanimously agreed that buyers from the Gulf region were nowhere to be found in 2014, a situation that left many developers of spacious luxury apartments in Beirut with a significant stock of unsold residential units.
A study conducted by Ramco Real Estate Advisers on 65 projects completed in Beirut in 2013, with the starting sales prices of firstfloor units exceeding US$ 2,800 per square metre, revealed that 277 completed apartments have not been sold by the end of 2013.
However, Beirut maintained the highest share of the total value of sales in the first nine months of 2014 at 28.2 percent, compared to 25.6 percent during the same period of 2013.
The average value per real estate transaction across Lebanon increased by 6.1 percent year on year to $128,382 in the first nine months of 2014, relative to average values of $120,990 in the same period of 2013 and $118,044 in the first nine months of 2012.