Real estate sales are soaring at a time when almost every other economic segment is suffering. The number of sale transactions increased 49 percent to more than 55,000 in the first nine months of 2020 compared with the same period a year earlier. The surge in demand that has started late last year has continued – against expectations. This was accompanied by dwindling supply as construction remains stagnant due to a lack of bank credit facilities and the surge in prices of building materials in local currency following the collapse of the lira.
Real estate is perceived by many as a safe haven, a destination for cash savings previously parked in banks. “Apartments and land are sought after by buyers fearing a haircut on their bank deposits,” according to the ‘Lebanon Real Estate Sector-A Temporary Relief rather Than a Genuine Recovery?’ report by Bank Audi. Pricing has become tricky, depending on the currency used in the transaction. Strong demand is likely to continue as long as there remain bank deposits getting freed after their lock-in term expires. Despite the surge in sales, stocks of properties still exist. According to a survey by InfoPro Research of construction projects in Greater Beirut, a stock of almost 18,000 unsold apartments existed at the end of August 2020. The number of sold units in that area during the first eight months of the year totaled more than 2,900 apartments. Most of developers have reported a surge in sales during that period compared with the same timespan a year earlier.
Soaring demand
“This is the highest level of demand for real estate properties recorded in the last four years,” said , Managing Partner at Century 21, a real estate brokerage company. According to the InfoPro survey, nearly, Secretary General of the Real Estate Developers Association (REDAL). According to , Chairman of Sodeco Gestion, a real estate brokerage and property management company, besides the growth of demand, the increase in the value of transactions was also driven by the rise in real estate prices. According to InfoPro, 32 percent of developers said that their apartment sales consisted of concluding a previously started transaction while the remaining 68 percent stated that it was a new deal. The uptrend was not steady over the nine-month period of 2020. Sales witnessed a downturn in March and April due to the country-wide Covid-19 lockdown and in August following the explosion in the Port of Beirut.
