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Lebanese real estate market remains unshaken by political, economic crises

BEIRUT: Despite Lebanon’s long-running political and economic crises on top of the Israeli war of 2006, new buildings are shooting up on the capital’s skyline even if sale volumes have fallen. “With all that Lebanon has lived through since the assassination of [former Prime Minister] Rafiq Hariri in 2005, we had expected the market to shrink,” said Guillaume Boudisseau, a consultant with the Ramco real estate company.

“Not only has the market remained stable, but construction sites are progressing quickly and [property] prices have increased by more than 50 percent in two years,” he said.

Boudisseau said more than 200 new projects were currently under development in the capital, including luxurious residential skyscrapers with lofty-sounding names like “Sky Homes,” “Dream Bay” and “Platinum Tower.”

Lebanon has been in turmoil since Hariri’s murder that has triggered a political paralysis between the Western-backed government and the pro-Syrian opposition. The two sides are now deadlocked over choosing a new president.

The country’s infrastructure was extensively devastated by Israeli bombardments during last summer’s war.

Construction permits in Beirut and the northern region of Tripoli totaled 3.17 million square meters in the first five months of the year, down by a significant 39.9 percent compared to figures from the same period of 2006, according to the latest quarterly report of Audi Bank.

“Real estate and construction activity were influenced during the first half of 2007, by the overall intricate political conditions and by the inflation of building materials, with mega-realty developments slowing down,” it said.

But despite the downward trend in construction, Boudisseau said “there is a surprising wind of optimism among contractors, even if they know that the appetite of Gulf clients has shrunk since the last war and that the volume of sales is less than before” the war erupted in July 2006.

Central bank Governor Riad Salameh said the continued interest in real estate was partly due to the fact that property values in Lebanon were lower than in neighboring countries.
http://www.dailystar.com.lb