RAMCO: $480M Worth of Unsold Apartments in 2014

In a recent publication, RAMCO revealed that the total bulk of apartments that were unsold in 2014 stood at 271, in Municipal Beirut, worth approximately $480M. In details, the census was based on 56 completed projects throughout 51 neighborhoods in the capital.

In addition, the sales ratio (residential area sold out of the total residential stock under construction) stood at 76% in 2014 comparing to 78% and 82% in 2013 and 2012, respectively. It is highly expected that the sales ratio will maintain its bearish trend given that the majority of real estate apartments are usually sold off-plan, which means before the effective construction of the units that could take up to 3 years on average. Accordingly, and noting that the deterioration of real estate demand mainly started in 2012, the sales ratio is projected to drop further, as it will mainly reflect the real estate demand of the previous three years.

Raja Makarem, Managing Director of RAMCO, believes that the underlying problem was the lack of understanding of the Lebanese real estate market dynamics. This led developers to fail in meeting the actual market demand and selling their units. Mr. Makarem anticipates that the unsold stocks of apartments illustrate the relative stagnation of the residential market.

Overview of Residential Projects Completed in 2014

Number of Projects 56
Total Number of Units1,236
Total Built-up Area (BUA)342,901
Number of Unsold Units271
Average Size of Unsold Apartments (SQM)310
Ratio of Unsold Units 24%
Total BUA Still Available (SQM)          83,976
Overall Take-Up Rate from Total BUA76%
Listed Value of Remaining Stock (USD)477,158,659
Number of Projects with 100% Sold14
Raito of Projects with 100% sold25%

Source: RAMCO

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