Real estate in Lebanon has experienced very contrasting periods. In the early 1990s, the real estate sector boosted the whole economy thanks to intensive reconstruction programs implemented by the government and other private institutions. New buildings were springing up all over the country.
This positive impact of the real estate sector on the Lebanese economy has been questioned in recent years. The vast majority of residential buildings that have been built over the past ten years have been aimed at a high-end clientele mainly from the Gulf, while internal demand has been oriented towards apartments and mid-range properties. As external demand, mainly from Arabs in the Gulf region, increased in volume, this led to a sharp increase in real estate prices. This is no longer the case, especially in recent years. Foreign demand has stabilized, adding to this the government’s approval of laws limiting the percentage of properties that can be sold to foreigners. The housing market is not flooded with cash like it was a few years ago, and prices are expected to stagnate for at least the next two to three years. Many positive signs emerge in this period.
The real estate sector is now managed by more professional institutions. This represents a major change for this industry where traditionally families mainly run this sector. The best illustration is that investors are now conducting market research and feasibility studies before the actual constructions. This was not the case 10 years ago.
Another positive sign is the return of international investors to downtown Beirut. Virgin, Ericsson and almost every financial institution in the country have their headquarters there. The major effort made by the country to attract investors is now bearing fruit.
This success is not surprising; Lebanon has many advantages for large companies. Its location makes it an ideal gateway to the Middle East and the quality of life can meet the expectations of expatriates and facilitates their establishment.
Beyond that, banking laws are favorable to foreign companies wishing to establish themselves in the region. The future can be considered promising. Several major projects are currently under construction. In downtown Beirut, a chain reaction is expected and can be explained as follows: the more multinational companies will move to downtown Beirut, the more multinational companies will want to set up their offices there. This doesn’t just apply downtown; this fact also affects the surrounding neighborhoods.
The real estate market in Lebanon has also seen a dramatic rise in terms of the investments that have been injected into it. These investments come from Arabs, expatriates and foreign investors.
Across the Arab region, the real estate sector in Lebanon has received the majority of Arab and foreign investment with a surge in demand on IT properties in Lebanon.
The real estate market in Lebanon was the main recipient of all Arab investments and constituted 80% of these investments.
Beirut, once considered the “Pearl of the Orient”, is now ranked the most expensive city in the Middle East and Africa, ahead of Dubai, Istanbul and Johannesburg.