BEIRUT

Local

Real estate transactions down more than 8 pct

  • File - Workers pour cement at a construction site in Beirut, Thursday, March 14, 2013. (The Daily Star/Hasan Shaaban)

BEIRUT: Real estate activity slowed in the first five months of 2013 with both the number of transactions and value dropping around 8 percent on a year-on-year basis. The number of real estate transactions shed 8.20 percent to 26,042 transactions as of the end of May, compared with 28,369 during the same period last year, according to Credit Libanais Bank’s weekly market research.

The aggregate value of real estate transactions dropped by 8.64 percent to $3.02 billion compared to $3.31 billion during the same period in 2012.

On a sequential basis, the number of transactions dropped from 6,625 in April to 5,798 in May 2013, while the value of transactions decreased from $785.95 million to $724.43 million during the same period.

In a bid to prop up the real estate sector, the Central Bank announced in January that it would give LL2.2 trillion ($1.46 billion) in credit facilities to commercial banks at a 1 percent interest rate.

The credit line would allow commercial banks to provide subsidized loans targeting real estate but its full impact wouldn’t materialize before 2014, according to economists.

Economists say the focus on housing loans might be an attempt by the Central Bank to fend off any future liquidity problems that might face small developers amid stagnant real estate sales.

Real estate activity plunged in 2012 with the number of sales transactions declining by 9.9 percent, following an 11 percent drop in 2011, according to statistics published by the Directorate of Land Registry.

Several real estate developers have told The Daily Star that demand for housing units has been gradually shifting from high-end luxury apartments in the capital toward smaller units (120-180 square meters) in the suburbs of Beirut.

According to a recent study by real estate adviser RAMCO, some 72 percent of residential projects in Beirut completed over the course of 2012 with a market value around $400 million are still unsold.

In the study RAMCO said 217 apartments – representing a total of 71,361 square meters – completed in 2012 remain on the market.

 
A version of this article appeared in the print edition of The Daily Star on June 24, 2013, on page 5.
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