Real Estate Market Continued its Recovery in H1 2016

Lebanon’s real estate market seems to have entered in a recovery phase during 2016, progressing from the low base reached in the previous years. This was also reflected in yearly progresses of the main construction indicators, of which construction permits that registered a 13.8% uptick by June 2016 and the 19.6% year-on-year (y-o-y) increase in the volume of cement deliveries by April 2016. Still, the progress denoted in the first half of 2016 does not reveal an improving sentiment or activity in the market but an adapting supply of real estate developers to the changing demand in terms of regional preferences, security situation and price ranges.

Starting with data provided by the Lebanese Cadastre Registry, real estate activity showed an improvement during the first half of the year with the number of transactions adding 4.4% year-on-year (y-o-y) to 39,100. This increase mainly resulted from respective yearly increases of 5.0% and 4.2% in built units and land transactions. Worth mentioning, the number of real estate transactions was equally divided between built units and raw lands.

Similarly, the value of real estate transactions rose at a faster pace of 5.9% y-o-y to $3.85B in H1 2016. This mainly resulted from the 11.2% annual growth in the value of land transactions, which was coupled to a slower 2.7% yearly rise in the value of built up transactions.

As a result, the average value per real estate transaction went up by a marginal 1.4% in H1 2016 to $102,835. In addition, and while the average land value per transaction progressed 6.7% in H1 2016 to $67,126, that of the built up units recorded a 2.1% yearly slip to $142,024.

Regionally, highest value remained concentrated in the capital Beirut, while the bulk of transactions were recorded in areas with relatively lower prices. Accordingly, Beirut ranked first with 27.10% share of total real estate transactions’ value by June 2016, followed by Metn and Baabda with respective shares of 14.29% and 10.43%. As for the number of transactions, North of Lebanon grasped the largest share of total number of transactions with 6,468 transactions (or 16.54% of the total), which could be mainly attributed to the improving security situation in the region following numerous security disturbances in the previous years. North Lebanon was tracked by Metn with 4,358 (11.15% of the total) and Baabda with 3,328 (8.51% of the total). These two areas are attracting newly married couples and buyers with lower purchasing capacity given their proximity to Beirut where most of them work and their relatively lower prices.

On a different note, the increase in the number of real estate transactions in the first half of 2016 was mainly due to the rising number of real estate transactions made by Lebanese nationals. This was revealed by the declining share of real estate transactions done by foreigners from 2.01% by June 2015 to 1.48% in the same period of 2016.

Total Number of Real Estate Transactions by June

Real Estate Market Continued its Recovery in H1 2016

Source: Lebanese Cadastre Registry

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