35.9 C
Saturday 19 June 2021
HomeWorldContinuing property market growth in Lebanon

Continuing property market growth in Lebanon

A recent report by Standard Chartered Bank concluded that there is continuing buoyancy of demand for property in Lebanon’s capital in Beirut. The Bank’s research data supports a forecast national economic growth rate of 5.5 per cent in 2011, which places it among the fastest growing economies in the Middle East region. Added to which the high performance of the Lebanese economy has driven an increase in population, which presently outstrips the pipeline of good quality residential accommodation.

According to local real estate agencies in Beirut, property values have risen on average by 25 per cent every twelve months for the previous five years, and even though the rate reduced to 10 per cent last year the market is expected to continue to increase.

Dubai-headquartered developer Damac Properties’ Managing Director, Ziad Al Chaar, believes that not only is Lebanon’s property market growth cycle sustainable, but it is further fuelled by end users seeking smaller and mid-range apartments. Al Chaar, whose company has developments ongoing in Beirut, says that this segment of the Lebanese market is still undersupplied. He describes small to mid-range demand as being driven by a combination well off young Lebanese seeking independence beyond the boundaries of the family home, as well as a growing number of former expatriates returning to their native land after living and working abroad.

A report from local institution Bank Audi said that there was minimal speculation in the market, with buy-to-live and trading up the dominant fundamentals. The bank too found that these purchasing groups were in turn underwritten by organic expansion in the economy plus an indigenously rising as well as a returning population.

According to the Global Property Guide (GPG) survey as at December 2010 prices for central Beirut apartments were typically between US$ 4,200 and US$ 6,800 per square metre (US$ 390 and US$ 632 per square foot). In the first survey conducted in 2004 average prices were approximately US$ 1,200 (US$ 112 per square foot), a fivefold increase in six years at the top end of the scale. All the more surprising, as the Lebanese Pound has experienced minimum movement against the US Dollar over the same period.

Gross rental yields in Beirut have fallen significantly in six years which is to be expected as prices rise. Yields on Beirut apartments now range from 2.7 per cent to 3.5 per cent, compared with 2004 when they stood at between 10 and 11 per cent. GPG also agree that the market is sustainable at high prices and low yields as a primarily home buyers environment


Please enter your comment!
Please enter your name here

- Advertisement -