Dubai: The many regional conflicts and Lebanon’s proximity to these battlefronts is having its fallout on some UAE residents’ plans.
Walid M., a communications professional based in Dubai, has been trying to find a buyer for his Dh3 million property in Bekaa Valley for more than four months now. By the looks of it, Walid might have to wait a lot longer, even though he is willing to consider offers lower than what he had paid to build the place.
“Still there are no takers — Bekaa is seen as being too close to Syria’s conflict zone and that’s putting off most buyers,” said Walid. “Or they are waiting for a more opportune time if I as the seller is forced to slash the asking price even further.
“The lack of interest is not confined to potential buyers based in the Gulf. Those forming the Lebanese diaspora based in South America are finding that economic concerns there are giving them less room to commit to major investments in Lebanon’s realty. The property market does seem jinxed.”
Walid’s situation is not an exception. Potential property buyers interested in acquiring in Lebanon right now are thin on the ground, even for properties in downtown Beirut or in the more secluded locales in the mountain regions. But even for those inured to the ups and downs of committing sizable investments in that market see the current situation as offering no short-term solutions.
Buy in bulk
“The natural reaction is to place everything on hold,” said Fadi Moussalli, Regional Director at the real estate consultancy JLL. “As such, Lebanon’s property transactions are dominated by the residential sector. But even now, project activity has not reached as bad a situation as it could have.
“Lebanon’s developers are equity-rich and have historically tended to fund a big proportion of their projects through equity or through pre-sales. The majority of them can afford to wait until the situation takes a turn for the better.”
But for those cash-ready investors looking to buy in bulk and willing to discount the risks, there are quite a few opportunities. “One very resilient asset class has been land and there could potentially be buyers on the hunt for plots rather than ready units,” said Moussalli. “Even in the past, there have been groups looking to get into Lebanon with large land acquisitions. At this moment, they could use their leverage to buy up at values that are at a significant discount to listed prices.”
How far could such discounts go? A ready 5-10 per cent cut on listed values is a live possibility. But stretching it to even 15 per cent may be within the realms of possibility. Potential buyers, even though there may not be many, are holding all the cards in Lebanon’s property market right now.
