Real Estate Prices In Lebanon, A Good Investment
The Lebanese economy has been registering a growth rate of 3% according to the International Monetary Fund (IMF). Inflation was estimated around 4% by the end of 2012. According to figures released by Bank Audi, Lebanon property prices registered an increase of 11.8% and 6.3% when adjusted for inflation year on year (y- o –y) in 2012 . The average value of property for sale in Lebanon in the same year was of LBP 175.25 million (US$ 116,000).
Analysts estimate that the real estate market in Lebanon will continue to flourish taking into consideration many factors; the relative political stability of the country in comparison to many other countries of the region, very affordable land prices in the range of LBP 3 million (US$ 2,000) to LBP 7.6 million (US$ 5,000) per square meter at very prime locations while underdeveloped areas land prices can range between LBP 1.2 to 2.3 million (US$ 800 to 1,500) per square meter, the Lebanese currency is not subject to a lot of volatility and interest rates of loans for real estate in Lebanon is often linked with either the US prime rate or LIBOR rate. The recovering US property market also boost prospect for better yields in the Lebanese market while during the US recession, Lebanon property prices were hardly affected mostly because of the positive growth of the economy.
Even though Banque du Liban has revised its estimate with regards to the growth of the property market because of tensions in neighboring countries, real estate investment in Lebanon still provide very good opportunities for return on investment (ROI). The Lebanese real estate market proved its resilience during the recent recession of the major economies of the world (US, UK, EU). Many investors sought property for sale in Lebanon as a safe haven.
The Lebanon real estate market benefits from local investors and international investors; apartments for sale in Lebanon and villas for sale in Lebanon can be obtained as investment for redevelopment and resold sometimes at more than 100% the initial capital investment or used to generate a steady stream of cash flow by offering rental services. Many banks are now much more willing to provide loans to homebuyer and not just developers. The outstanding housing loan is estimated of being more than LBP 7.27 trillion (US$ 4.8 billion). Properties for rent in Lebanon have an average occupancy rate of about 60%.
Lebanon property prices provide great opportunities for investors. Analysts at Realty, the leading real estate agent in Lebanon, have estimated that the price of properties in Lebanon have soared to 120% since 2005. Unlike the sub-prime scandal in the United State, the rapid increase in prices of properties in Lebanon is not considered as a bubble but actually a reflection of the true value of the property market. Most property for sale in Lebanon are either new or recently built commanding a price difference of about 20% between the two. Although a small weakening of demand in large apartments has been noted, analysts do not expect the price to drop and consider that a lot of developments have already recuperated capital expenses such that developers with unsold units are in a better position to wait. Analysts also predict an increase in the price of small apartment units.
Lebanon is a small country with a border to the Mediterranean Sea. It is a fantastic touristic location. In recent years the country has benefited from political and economic stability. Turmoil in other countries in the neighborhood has meant that many foreign investors find Lebanon a lot more attractive. Having had its share of instability, many areas in Lebanon are in need of redevelopment; a real estate investment in Lebanon offers great ROI.
Taking consideration of a booming economy, a relatively stable interest rate, a stable currency, there is very low speculation from analysts with regards to the property market in Lebanon. The outlook is favorable for the coming years and has been reflected on Lebanon property prices for the past decade with a steady increase.
Lebanon is registering high construction activities which are fueling economic development with ripple effect on all sectors of the economy. Although the prospect of growth has been slightly revised downward, it is still significant; there is a high demand in property for sale in Lebanon which has developers building many apartment buildings to satisfy the demand. Investment opportunities in the Lebanon real estate market is estimated to continue providing great returns therefore great opportunity for buying apartment or villa for sale in Lebanon.
Realty Lebanon - Real Estate in Lebanon
Back to Real Estate Articles