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Expat demand fuels Lebanese property boom
Expatriate demand is fuelling a boom in Lebanon's real estate market, which remains resilient despite political instability and lack of appetite from Gulf investors, a leading property consultant said on Saturday.
- Reuters
- Published: 00:11 May 4, 2008
Beirut : Expatriate demand is fuelling a boom in Lebanon's real estate market, which remains resilient despite political instability and lack of appetite from Gulf investors, a leading property consultant said on Saturday.
Prices in Beirut rose 25 per cent in the first quarter this year after a 30 per cent hike in 2007, Raja Mak-arem, head of Ramco Advisers, said at the sidelines of the Arab Economic Forum.
The Arab Economic Forum, an annual business gathering organised by Al-Iktissad Wal Aamal magazine, ended yesterday.
"We will probably continue to see prices rise, especially in high-end and medium properties. The Lebanese have stepped in as the Gulf investors refrained from buying, which has kept up the momentum of the market," Makarem said.
Makarem said Lebanese buyers, especially expatriates working in the Gulf and the West, now compose around 90 per cent of buyers. Gulf investors accounted for 30-40 per cent of the market before the 2005 assassination of the former Lebanese premier Rafik Hariri, which led to a political crisis Lebanon is still grappling with.
Lebanon, traditionally the playground of the Middle East, attracted investment from Gulf nationals, mainly in Beirut property, for decades with its mix of social tolerance, banking system secrecy and a laisser faire economy that has been the hallmark of the country since it was created by colonial powers in 1920.
Crisis
But a prolonged political crisis and recent warnings by Gulf governments to their nationals against travelling to Lebanon have contributed to falling demand from Gulf investors, who have put more money into Jordan and Syria and expanded their home markets.
The Gulf was a key target of Hariri in his drive to rebuild downtown Beirut after the 1975-1990 civil war. Hariri, who had Saudi nationality, established real estate company Solidere to rebuild the centre.
The company, which has $8 billion of assets is now asking $2,000-$5,000 per square metre of buildable area compared with $1,200-$2,000 before Hariri was killed. Solidere has sold more land since the Hariri assassination than it sold since it was founded in 1994, Makarem said.
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