BEIRUT: A sparsely attended real estate fair at the Beirut International Exhibition and Leisure center showed the drop in the rush to jump into the country’s housing market as both foreign and local investors exercise caution amid regional unrest.
“This year is definitely challenging,” said Antoine Habr, managing director at Premiere Properties at his booth on the second day of the annual Dream real estate exhibition, who estimates that Gulf investment in real estate has dropped more than 50 percent over the past two years.
He added that some developers haven’t sold anything in the past six months, whereas before they were selling on a weekly basis.
Until a couple of years ago, there appeared to be no end in sight to the growth of Lebanon’s real estate sector.
Developers and real estate agents often boasted that their units would sell out long before their buildings had been constructed.
Today, many apartment units sit empty long after construction, a symptom of the regional unrest that has sporadically hit Lebanon over the past few of years, resulting in the kidnapping of citizens from the Gulf and subsequent travel warnings issued by their governments this summer.
“Investment really dropped starting in May with the unrest in Tripoli,” said Alain Bassoul, COO of Prime Consult, an asset management company that specializes in real estate investment.
“This drove away all the Gulf tourists. Maybe they’re not all investors, but they’re an engine of the Lebanese economy.”
Now, he says, “People fear investing large amounts. Sooner or later we’ll adapt to the situation in Syria. We’ll have to, and life will go on.
“Last year wasn’t very good either, and this year is worse.”
Aside from Gulf investors, he said that even some Syrian businessmen reneged on a real estate investment, saying they were looking for a more stable place to put their money.
He recalled them saying, “We’re trying to get away from the problems.”
At a nearby booth, Ziad Karkaji, real estate development manager at Premium Projects, a Beirut-based development and construction company, said that he has seen around 40 percent less demand for investment in real estate compared with two years ago.
He did, however, note that there’s still strong demand from “end users” – buyers interested in living in the apartment rather than flipping it for a profit.
With the drop in investment in one of Lebanon’s most lucrative sectors, there appears to be good news for new home buyers.
“The positive side is that developers will be forced to study prices and be more affordable,” said Habr, who believes the sector is not in crisis when taking into account the regional turmoil and previous years’ speculation bubble.
“Before, people were basing prices on the future and not on the actual value. If you want to survive, you need to think long-term.”