Lebanese residents and expats accounted for the vast majority of sales of residential units in 2014, real estate developers and brokers told The Daily Star, noting almost nonexistent demand from foreign buyers.
“We have witnessed slight demand on small residential apartments in Beirut during summer and the market is not dead but it is slow,” said Guillaume Boudisseau, a property consultant at Ramco.
Boudisseau attributed the sluggish demand to the region’s deteriorating security situation, which is weighing heavily on clients’ purchasing habits.
“The deteriorating regional situation is having a very bad impact on demand by foreigners which is very limited nowadays,” he said.
“Demand is coming mostly from residents at an average of 60 percent while expatriates’ share ranges from 30 percent to 40 percent,” he said.
Echoing Boudisseau’s remarks, Nadim Kazma, senior property consultant at Property Brokerage and Management, said that demand on residential apartments increased only slightly during summer compared to the beginning of the year, but it remained very slow in comparison with previous years.
“We saw some demand on small apartments but it is still slow compared to previous years when the Syrian crisis was still at the beginning,” he said.
Kazma also attributed the drop in sales to the complicated security situation in the region. “The real estate sector is usually highly impacted by the security and political situation,” he said.
He added that demand was coming mostly from residents and expatriates seeking small apartments.
“Big apartments are not very attractive nowadays because demand is coming from residents who are mainly interested in small units,” Kazma said.
However, he noted some exceptions in Downtown Beirut.
“I have sold, for instance, two apartments at $3 million each to investors who are planning to sell them in two years when prices go up again,” he said.
Kazma said some developers with projects in the Beirut Central District were slashing prices by up to 20 percent to attract buyers.
But those who are selling at a discount continue to represent a minority, Boudisseau said.
According to the consultant, prices of residential apartments saw no declines except for one or two projects in BCD.
“Prices did not change in general but one may find one or two projects in BCD with a lower price per square meter,” he said. “It is an individual strategy and each one has a different strategy.”
A report issued by Ramco said that BCD has been divided into five geographical sectors. It added that average prices in the most expensive sector vary between $6,000 and $7,000 per square meter for first floor apartments.
“As there are no projects currently under construction around the Bay of St. Georges, averages have dropped compared to last year,” the report said.
“The highest averages are located in the area of Foch-Allenby, which enjoys views of the Port of Beirut,” it added.
Developers interviewed by The Daily Star said they had not seen new construction projects lately.
“It is a great challenge for any developer to buy land nowadays and start with a new project,” Boudisseau said.
Echoing Boudisseau, Kazma said there were currently no new projects though developers were continuing with constructions they had started years ago but at a slower pace.
By Dana Halawi
