but hope is a filler..
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This Blog is dedicated to describe and share everything related to the real estate sector in Lebanon.
Wednesday, March 30, 2011
Tuesday, February 22, 2011
Real Estate in Lebanon: Will Lebanon face Real Estate drawback consequence...
Real Estate in Lebanon: Will Lebanon face Real Estate drawback consequence...: "Will Lebanon face Real Estate drawback consequences similar to the one in UAE? In my opinion as a Real Estate professional & as noticed..."
Monday, February 21, 2011
Will Lebanon face Real Estate drawback consequences similar to the one in UAE?
Will Lebanon face Real Estate drawback consequences similar to the one in UAE?
In my opinion as a Real Estate professional & as noticed over the past 20 years, the Lebanese Real Estate sector is safe & promising. This is mainly due to the fact that since 2005 till now, 90% of estates were purchased by Lebanese whose main target is to own a house in their homelands; on the other h&, 10% were bought by investors or in other words speculators, whose main target is purely investment. This observed factor is promising since history shows that even when faced with a crisis, economic or political, if majority of estates are owned by Lebanese, the real estate sector tends to remain intact; versus the other scenario where if the majority of estates were owned by investors, this same sector will eventually crash due to the latter exiting the market to minimize their losses, leading to oversupply & thus prices reaching bottom. If we take a look at the past 20 years, history proves the above stated fact:
- In early 90's Mr. Rafic Hariri was appointed Prime Minister, which encouraged all sorts of Arabs to invest in Lebanon. It was then noticed that more than 90% of estate owners were investors or speculators, in other words
- In mid 90s, after the stock market world crash, the Lebanese Real Estate market also crashed mainly because all investors who owned estates in Lebanon exited very fast the Lebanese Real Estate market, leaving Lebanon with a huge Real Estate over supply & a true crisis
- From mid 90s till 2003 (Paris II), the Lebanese Real Estate sector was really damaged & rare transactions were recorded even though prices had dropped by 50%
- Between 2003 & 2005, with Paris II convention, it was clearly noticed that the Real Estate was revived & inquiries as well as transaction were recorded. Also, 90% of buyers were investors & Arabs with only 10% of real Lebanese buyers
- In 2005, assassination of PM Hariri rocked our hopes & in a snap all the country ceased functioning.. We were expecting a disaster due to fact that real estate investors were exiting the market; BUT at this same time when the Syrian troops left Lebanon, we witnessed a remarkable change in our inquiries when all of a sudden, every Lebanese, Muslim or Christian, was interested to buy estate in Lebanon; this resulted in 90% of transactions owned by real Lebanese Buyers creating an equilibrium in the sector
- In 2006, the war over Lebanon surprisingly affected the real estate sector positively after thousands of purchases & rents were recorded, due to the reallocation of thousands of Lebanese from bombed areas to new war intact streets & neighborhoods
- So from 2005 till end of 2008 the Real Estate sector was prospering & booming positively mainly because of the 90% real Lebanese buyers versus ONLY 10% to Arab investors & speculators
- At the end of 2008, with the world financial crisis, Lebanon was also safe because of the 90% real Lebanese buyers versus ONLY 10% to Arab investors & speculators. In addition to the fact that the Lebanese central bank was very conservative regarding not allowing the local banks to invest in the USA real estate portfolios & stocks & because collaterals on housing loans were very high compared with similar collaterals abroad.
Another reason why the Lebanese Real Estate sector, is considered very safe, is because supply is much lesser than demand. In great Beirut, if we take the empty lands + old demolished buildings we merely reach a thousand lands. If we build all these lands, we might generate a max of 30,000 apartments. If we add 10,000 apartments from the existing under construction projects to these 30,000 apartments, we will reach a max supply of 40,000 apartments in great Beirut VERSUS 300,000 expatriate Lebanese immigrant & over 100,000 investors & Arabs who wish to own property in Beirut.
AS A CONCLUSION WE HAVE 400,000 POTENTIAL BUYERS WHO WILL GRADUALLY WANT TO OWN THE LIMITED POSSIBLE SUPPLY OF ONLY 40,000 APARTMENTS.
Truly yours,
- In early 90's Mr. Rafic Hariri was appointed Prime Minister, which encouraged all sorts of Arabs to invest in Lebanon. It was then noticed that more than 90% of estate owners were investors or speculators, in other words
- In mid 90s, after the stock market world crash, the Lebanese Real Estate market also crashed mainly because all investors who owned estates in Lebanon exited very fast the Lebanese Real Estate market, leaving Lebanon with a huge Real Estate over supply & a true crisis
- From mid 90s till 2003 (Paris II), the Lebanese Real Estate sector was really damaged & rare transactions were recorded even though prices had dropped by 50%
- Between 2003 & 2005, with Paris II convention, it was clearly noticed that the Real Estate was revived & inquiries as well as transaction were recorded. Also, 90% of buyers were investors & Arabs with only 10% of real Lebanese buyers
- In 2005, assassination of PM Hariri rocked our hopes & in a snap all the country ceased functioning.. We were expecting a disaster due to fact that real estate investors were exiting the market; BUT at this same time when the Syrian troops left Lebanon, we witnessed a remarkable change in our inquiries when all of a sudden, every Lebanese, Muslim or Christian, was interested to buy estate in Lebanon; this resulted in 90% of transactions owned by real Lebanese Buyers creating an equilibrium in the sector
- In 2006, the war over Lebanon surprisingly affected the real estate sector positively after thousands of purchases & rents were recorded, due to the reallocation of thousands of Lebanese from bombed areas to new war intact streets & neighborhoods
- So from 2005 till end of 2008 the Real Estate sector was prospering & booming positively mainly because of the 90% real Lebanese buyers versus ONLY 10% to Arab investors & speculators
- At the end of 2008, with the world financial crisis, Lebanon was also safe because of the 90% real Lebanese buyers versus ONLY 10% to Arab investors & speculators. In addition to the fact that the Lebanese central bank was very conservative regarding not allowing the local banks to invest in the USA real estate portfolios & stocks & because collaterals on housing loans were very high compared with similar collaterals abroad.
Another reason why the Lebanese Real Estate sector, is considered very safe, is because supply is much lesser than demand. In great Beirut, if we take the empty lands + old demolished buildings we merely reach a thousand lands. If we build all these lands, we might generate a max of 30,000 apartments. If we add 10,000 apartments from the existing under construction projects to these 30,000 apartments, we will reach a max supply of 40,000 apartments in great Beirut VERSUS 300,000 expatriate Lebanese immigrant & over 100,000 investors & Arabs who wish to own property in Beirut.
AS A CONCLUSION WE HAVE 400,000 POTENTIAL BUYERS WHO WILL GRADUALLY WANT TO OWN THE LIMITED POSSIBLE SUPPLY OF ONLY 40,000 APARTMENTS.
Truly yours,
Samer I. Al-Abdallah
CEO
REVIEW S.A.R.L.
www.reviewsarl.com
www.reviewsarl.tel
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