The number of construction permits witnessed a yearly plunge of 15.87% to reach its lowest level in 6 years at 7,387 in H1 2015, compared to a higher level of 8,780 in 2014. In this context, the construction area authorized by permits (CAP) registered a 19.43% year-on-year (y-o-y) drop amounting to 5.92M sqm by June, compared to 7.34M sqm by June 2014.
Noting that permits are usually issued at least 6 months after applications are filed, the fall in construction activity is due to the declining trend in demand that has started in 2011 following the Arab spring and the Syrian unrest. Coupled with that, construction permits might have taken a big hit in the past year to reach this lowly level, as the presidential vacuum is ever prominent.
The average area per transaction dropped by June 2015, from 836.52 sqm/permit in 2014 to 801.09 sqm/permit, bearing in mind that mainly only large developers are still in the market.
In June alone, the number of permits stood at 1,571, a 0.38% y-o-y down tick from June 2014’s level. CAP also exposed a 13.88% yearly plunge to 1.08M sqm from 1.25M sqm recorded in June of last year. In terms of regions, Mount Lebanon grasped 42.84% of total permits, while South Lebanon and Nabatiye took respective shares of 17.12% and 12.48%.
Monthly Number of Construction Permits
Source: Orders of Engineers in Beirut and North