BEIRUT: Some 72 percent of residential projects in Beirut completed overthe course of 2012 with a market value just shy of $400 million are still unsold, according to a study released Tuesday by real estate adviser RAMCO. In the study RAMCO said that 217 apartments – representing a total of 71,361 square meters – completed in 2012 remain on the market.
The study further proves that economic stagnation and political uncertainty are taking their toll on the once-thriving real estate market in Lebanon.
Most developers and brokers have told The Daily Star that potential buyers have been focusing more on small-to-medium-size flats outside the capital.
According to RAMCO, 18 – or 28 percent – out of 65 residential projects with an asking sale price of at least $2,800 per square meter are completely sold out.
“This selection of 65 buildings posts an overall take-up ratio of 82 percent,” the report said.
“A total of about 100 projects were completed across Municipal Beirut in 2012 but the study retained only the 65 projects that have a sale price above $2,800 per square meters.”
RAMCO added that building projects completed in 2012 were launched between 2008 and 2009.
“They thus benefited from a booming residential market. The high take-up ratio could thus be slightly inflated by the excellent sales of the years between 2008 and 2010, whereas transactions were notably slower in 2011 and 2012,” the report explained.
“Although the current take-up ratio is slightly lower than take-up ratios of the boom years, which used to stand around 85 percent, it is a very slight drop, and it is too early to say whether it is a long-term change in market trends or simply a temporary consolidation phase,” said Raja Makarem, founder and managing director of RAMCO.
There is also wide concern that the stagnation in the real estate market will continue if politicians fail to form a new Cabinet and if the Syrian conflict further spills over into Lebanon.
The low demand for properties is also affecting the revenues of the Finance Ministry which relies heavily on the taxes from any real estate transaction.