The performance of real estate sector is affected by the current financial crisis. Investors believe that the real estate sector in Lebanon is considered the safest investment right now as depositors are trying to release their deposit from banks by investing in real state. However, following the devaluation of Lebanese pound, the stock of residential units remains significantly higher than the actual demand since most of the Lebanese citizens and specially the youth find it hard to buy an apartment, with the absence of loan facilities, with no government plan to support them.
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 55.81% to stand at 68,881 transactions by November 2020. In its turn, the value of total RE transactions stood at $12.27B by November 2020, compared to $5.74B in the same period last year, up by 113.78%. As such, the average value per transaction increased from 129,949 in September 2019 to 178,296 in the same period this year.
On a monthly basis, the number and value of RE transactions stood at 6,038 in the month of November 2020, which was almost 2 times higher than the 3,300 transactions recorded in November 2019. In addition, the average value of Real estate transactions each month in the past 5 years stood in a range of $570M to $800M, compared to $969M in the month of November 2020 alone. It also seems that foreigners performed 120 transactions of November’s total RE transactions, compared to 64 transactions in November 2019. The drop in foreign investment in real estate, reflects the mistrust in the Lebanese economy, as foreign investments in Lebanon are discouraged 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 1,309 transactions (or 16.37% of total RE transactions) were concentrated in the region of Baabda alone in the month of November 2020. The Metn, Keserwan and South follow, each grasping the respective shares of 12.71%, 11.73%, 6.62% of the total RE activity in November 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 19.02%) worth $1.67B by November 2020. The South and the North followed, constituting 13.62% and 12.93% of the total, each worth $1.03B and $692.8M, respectively. Notably, the Metn and Keserwan regions, respectively, comprised 12.10% and 11.54% of the total transactions, whose total values stood at $1.79B and $1.22B, respectively.
Total Number of RE Transactions by November
Source: Cadastre, BLOMInvest