No more deluxe for Lebanon: property developers shrink house sizes
Developers in Lebanon are expressing serious interest in diversifying away from luxury apartments as demand soars for smaller, more affordable housing units in or near the capital Beirut. “The real estate market is changing,” Angelo Hani, from Etage & Terre Real Estate, told The Daily Star at the Beirut International Property Fair 2012. “Right now everybody is searching for small apartments close to Beirut, where they can get married and have a small house – this is what we are trying to do now.”
“The demand is currently high for smaller apartments of up to 120 to 150 square meters,” says Abdul-Karim Saade, general manager of Bricks Real Estate. “We are considering this for out next project.”
A shift now to relatively cheaper properties would also be timely, as interest wanes in high-end units amid a deteriorating domestic security situation coupled with regional crises that have dominated the Middle East for the past year, and with Lebanon feeling the ripples of the Syrian crisis.
“The market at the moment is stagnating,” says Yasmia Takieddine of Estates Property Development and Investment. “Initially, it was because of what is happening in the worldwide economy, but now, it’s because there are some tensions in the country and continued tensions in the region.”
Sabah Abi-Hanna, owner of Abi-Hannah architecture, agrees. “I would say it’s a foggy situation,” he says. “We can’t know what will happen next.”
“At first it [the regional turmoil] didn’t affect the market that much,” says Takieddine. “It forced more people to invest here [in Lebanon] because it seemed like it was calm. But now I think they are more reluctant.”
“It’s been bad for about five months now,” agrees Roula Chalhoub of Joseph Chalhoub Real Estate Development. “We have a problem in Lebanon, nothing is stable.”
According to Bank Audi, the number of real-estate transactions fell by 3.39 percent to 16,784 in the first quarter of 2012, down from 17,373 in the first quarter of 2011.
But not all is gloomy in the spacious glass hall housing the exhibitors’ areas at the Habtoor Hilton Grand Hotel in Sin al-Fil as the majority of participants seem to agree that the market will improve in the near future.
Developers, contractors and real estate agencies are optimistic, saying the downturn is only temporary and due to regional instability.
“Expectations for the market are positive,” says Abi-Hanna,” because you can only be positive in a situation where the unknowns are so plentiful.”
Exhibitors at the annual fair showcased their newest projects and met with regional potential investors interested in Beirut’s real estate market.
Explaining trends in the real estate market, Saade says prices may remain low for a few years and then shoot up, exceeding their original value. Even if one invests in a downturn, once the market picks up, there is always profit.
“Real estate is always the best investment,” Takieddine adds.
Also trending in the Lebanese real estate market is the notion of green and sustainable housing in the city.
“We are cooperating with an environmental NGO, and for every square meters of land we build on, they plant a square meter of green,” Takieddine explains. “We are trying to take the concept of a green neighborhood while making it more affordable.”