by Dana Halawi

BEIRUT, April 10 (Xinhua) -- The development of Lebanon's real estate sector is slowing down, with demand for properties falling by around 80 percent in 2022 and 2023 compared to the years before the 2019 financial crisis, said economists and real estate developers.

Nassib Ghobril, head of the economic research department at Byblos Bank, told Xinhua that demand for properties has dropped by at least 80 percent in the four years after the crisis, due to the lack of market liquidity.

In 2020 and 2021, buyers could still pay for their properties through cheques, which were needed by the real estate developers to settle their bank loans, said Ghobril.

However, after paying off most of their bank debts, the developers only accepted cash, making it very difficult for Lebanese buyers to afford properties as the bankrupt banks froze tens of billions of dollars saved in their accounts, he noted.

Adnan Rammal, a real estate developer and representative of the trade sector in the Economic and Social Council, attributed the decline in demand to Lebanese buyers' reduced purchasing power following the devaluation of their currency as a result of the severe financial crisis.

Before the crisis, according to Rammal, around 60 to 70 percent of properties sold were small apartments priced at approximately 150,000 U.S. dollars. However, buyers of these apartments, mostly employees paid on wages, saw their purchasing power decreased a great deal during the crisis.

Making matters worse, the collapse of the banking sector made those employees who relied significantly on loans no longer had access to them.

According to developers, the sharp decrease in property demand in Lebanon led to a price drop of around 50 percent from pre-crisis levels.

Still, Raja Makarem, chairman and founder of Ramco Real Estate Advisors, believed that the real estate sector is a safe haven in the current crisis as the banking system had only saved 15 percent of the deposits' value.

"It is good to invest in the real estate sector today, but it will take buyers around three years to sell again when confidence is restored for prices to pick up," he said, adding that stability and security are essential factors to restore confidence in the sector.

Developers have stressed the necessity for the government to take urgent measures to revive the real estate market and some other sectors of the economy.

Rammal said that the banking sector must be restructured in order for it to provide loans to buyers as before.

"If the banking system cannot finance the private sector, no economy can grow. In addition, we need banks to finance the import of raw materials for the construction of new projects," he said. Enditem

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