Lebanese financial crisis had a positive effect on the real estate sector in Lebanon, which witnessed an expansion in 2020. Investors believe that the real estate sector in Lebanon is considered the safest investment right now, while other sectors are still suffering from the contraction of the Lebanese economy. However, most of the Lebanese citizenship and specially the youth find it hard to buy an apartment, with the absence of loan facilities, with no government plan to support them, and with the devaluation of Lebanese pound.
According to the data from the General Directorate of Land Registry and Cadastre (LRC), the number of Real estate (RE) transactions which may include one or more realties, rose by a yearly 49.13% to stand at 55,108 transactions by September 2020. In its turn, the value of total RE transactions stood at $10.07B by September 2020, compared to $4.74B in the same period last year, up by 112.4%. As such, the average value per transaction increased from 128,228 in September 2019 to 182,860 in the same period this year.
On a monthly basis, the number and value of RE transactions stood at a 6-year high of 10,061 in the month of September 2020 alone, which was almost 2 times higher than the 5,821 transactions recorded in September 2019. In addition, the average value of Real estate transactions each month in the past 6 years stood at $603M, compared to $1.69B in the month of September 2020 alone. It also seems that foreigners performed only 42 transactions of September’s total RE transactions, compared to 112 transactions in September 2019. The drop in foreign investment in real estate, reflects the mistrust in the Lebanese economy, as foreign investments in Lebanon is refrained due to the instability in the Lebanese banking sector and the uncertainty about the Lebanese political situation. In turn, a regional breakdown of the Real Estate activity revealed that demand on Real Estate was allocated across the different regions of Lebanon during this month. For instance, a substantial 2,080 transactions (or 19.14% of total RE transactions) were concentrated in the region of Baabda alone in the month of September 2020. The North, Keserwan, Metn and the South followed, each grasping the respective shares of 5.10%, 13.23%, 14.81% and 8.31% of the total RE activity in September 2020.
Meanwhile, a year-on-year breakdown of RE activity showed that Baabda also grasped the lion’s share of the total number of RE transactions (equivalent to 20.67%) worth $1.6BM by September 2020. The Metn and the North followed, constituting 11.79% and 11.91% of the total, each worth $1.72B and $563.6M, respectively. Notably, the South and Keserwan regions respectively composed 13.08% and 10.68% of the total transactions, whose total values stood at $834.4M and $1.2B, respectively.
Total number of RE transactions and Y-o-Y change in foreigners’ share by September
Source: Cadastre