The economic situation in Lebanon have had wide ranging implications on construction companies at the time the real estate sector is going through a struggling period. Furthermore, the fluctuation of the Lebanese pound exchange rate inhibits the construction companies from starting new real estate projects where they pay for all their construction materials in dollar currency, not to mention the subdued demand because of the economic depression.
According to the data from the Orders of Engineers in Beirut and Tripoli, the total construction permits witnessed a year-on-year (YOY) decrease of 73.10% to reach 159 permits by January 2021. Notably, the Construction Area Authorized by Permits (CAP) slumped by an annual 60.09% to 71,350 square meters (sqm), mainly reflecting the little interest of investors in undertaking new projects.
Compared to the same period last year, construction activity witnessed a prominent decline regionally. Across the governorates, Mount Lebanon, grasped 33.96% of the total permits, accounted for 54 permits compared to 218 by January 2020. However, for the South, it constituted 18.24% of the total permits, its respective number of permits declined to 29 permits from 147 permits. In Nabatieh, 15.72% of the total permits, permits accounted for 25 compared to 77 permits by January 2020. In Bekaa and Beirut, 8 and 5 construction permits were issued by January 2021, down from 36 and 28 permits respectively in the same period last year.
Number of Construction Permits by January
Source: Orders of Engineers in Beirut & Tripoli