Lebanese Are “Fighting Over Flats They Don’t Need”

Lebanese Are _Fighting Over Flats They Don't Need

While almost most industries races to the bottom, real estate is flourishing amid Lebanon’s collapse.

As the Lebanese pound disintegrates, many Lebanese, who still have some significant savings, are turning to buy property as a last resort to save their money’s value.

What’s currently happening in Lebanon’s real estate world is quite interesting. At a time when most people’s debts are compounding and spiraling out of control, property sellers are paying back their dues of 5 years.

Since the crisis hit the banking sector, depositors have been hunting for a way to release their hard-earned “lollars” from the grip of their banks, as the threat of a haircut looms.

This is especially true for the country’s upper-middle class, most of which is taking refuge in real estate.

By purchasing property mostly through bank checks, they hope to freeze their assets as the inflation tears through savings and more volatile investments.

The result of this was a jump in the real estate sector after years of loss and stagnation.

Despite property prices increasing by 30% since October, sales have tripled compared to this time last year, Guillaume Boudisseau, from real estate consultancy Ramco in Beirut, told The National.

“The country is nearly bankrupt and, in parallel, people are fighting over flats they don’t need,” he said. “It’s crazy.”

It has already been established that Solidere saw a significant boost in sales this year.

The company told the same source that it has sold $340 million worth of property and plots, averaging between $15 million and $60 million each, since early 2020. As a result, Solidere closed its debts with local banks.

The same can be said for most real estate developers in Lebanon. They seem to be having no trouble paying back much of their loans.

However, on the buyers’ side, who view their purchases as a winning investment, it may not be as good an idea for the long term as it may seem.

Christian Baz, a real estate broker, shed light on this issue, telling The National that people sought refuge in real estate “without any visibility in the long term because they had to get their dollars out of the bank.”

“But they don’t realize that property that is not lived in or not rented has a cost in taxes and ownership expenses. Next year, they’ll probably re-sell with a loss,” he explained.

Like everything else in the country today, even the value of the real estate, normally a relatively safe investment, is shaken by the collapse.