RAMCO: Prices of Residential Apartments Pulled Down in 2017

RAMCO’s Beirut Residential Price Index revealed that the sale prices of residential apartments within the neighborhoods of Municipal Beirut dropped by 1.8% in 2017 (prices exclude developers’ negotiation margins and discounts). The real estate advisory firm emphasizes that “the drop [in 2017] is more pronounced [with] developers adjust[ing] their prices very slightly before negotiation.”

It is worth to mention that the study covered 194 residential buildings under construction in 56 neighborhoods across Municipal Beirut. During the market slowdown, 51.6% of the projects maintained their prices compared to 2016, but this is attributed to developers who adopt the ‘wait and see’ approach, that is: waiting for potential customers before granting any discount. Nevertheless, RAMCO estimated that the prices of residential apartments effectively dropped by approximately 15% since 2013.

In fact, Raja Makarem, Founder and Managing Director of RAMCO sarl, explains, “[with] the buyer in a position of strength, the developer has few choices to attract potential buyers other than being flexible and reducing prices”. Meanwhile, 36.1% of all projects under construction lowered their official ask prices, compared to 23.1% in 2016. Moreover, 9.3% of the total number of projects reduced their prices by 10-20%. Lastly, about 12.3% of the projects were more expensive in 2017, compared to 11.6% in 2016.

Evolution in Asking Sales Prices*

Year 2017 2016 2015
Description Number          Share of

of                       Stock

Projects              (%)

Number          Share of

of                       Stock

Projects              (%)

Number          Share of

of                       Stock

Projects              (%)

Increase 24                     12.3 25                     11.6 33                     13.3
Stable 100                   51.6 128                     59.5 141                     56.9
Decrease 70                  36.1 62                    28.9 74                     29.8
Total 194                   100 215                   100 248                  100
Y-o-Y

Change (%)

-1.8 -1.5 -1.2

*in Municipal Beirut

Source: RAMCO sarl, April 2018.

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