According to the data from the Orders of Engineers in Beirut and Tripoli, the total construction permits witnessed a year-on-year (YOY) remarkable decrease of 39.49% to reach 10,915 permits by December 2023. Similarly, the Construction Area Authorized by Permits (CAP) plunged by an annual 45.96% to 4,537,427 square meters (sqm), mainly driven by public institution’s strike, decline of interests towards investing in real tangible assets and less overall income.
In the same token, construction activity witnessed a significant decrease regionally compared to last year. Across the governorates, Mount Lebanon, grasped 34.92% of the total permits, and accounted for 3,811 permits by end of year 2023 compared to 6,985 previous years. However, for the South, it constituted 29.15% of the total permits; its respective number of permits reached 3,182 permits compared to 5,193 permits by end of last year. In Nabatieh which holds 20.95% of the total permits, its share accounted for 2,287 by December 2023. In Bekaa, 1,045 construction permits were issued by December 2023 down from 1,709 in last year, while in Beirut only 323 construction permits were issued by December 2023. The decrease is more notable given the lack of bank lending.
In 2023, Lebanon experienced a concerning deterioration in construction permits, reflecting the harsh impact of a persistent economic downturn over the past three years despite some breakthrough. The country is still grappling with political instability, exacerbating an already challenging situation. High construction costs and limited financing options further compounded the decline in construction permits, making it increasingly difficult for developers and investors to initiate projects. Additionally, Lebanon witnessed a notable shift in market demand for real estate, as uncertainties and economic challenges led to a reassessment of priorities among potential buyers and tenants. This confluence of factors has created a challenging environment for the construction sector in Lebanon, emphasizing the multifaceted nature of the issues influencing the decline in construction permits.
Number of Construction Permits by December 2023
Source: Orders of Engineers in Beirut & Tripoli
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