In this context, he is considered a real estate expert “Lebanon 24” “Transferring the fifth installment of the Arab Fund loan to the Housing Bank could contribute to moving the Lebanese real estate market, but its impact will be limited and localized rather than a comprehensive transformation of the market.”
He points out that “there are several factors that must be taken into consideration:
Firstly: This financing may help increase the ability to purchase homes, as housing loans were almost at a standstill after the banking crisis, which led to a decline in local demand for apartments. When subsidized loans are available through the Housing Bank, a segment of middle-income people can return to thinking about buying a home.”
secondly: Stimulating the demand for medium and small apartments, as the beneficiaries of the Housing Bank’s programs are usually concentrated in the first housing category and not luxury real estate, so ready-made residential projects or apartments with medium prices may benefit more than others.
Third: Supporting the construction sector and related services, as the increase in sales is reflected in contractors, engineers, building materials companies, and real estate registration offices.”
Why might the impact remain limited?
The real estate expert says, “The volume of financing is not huge compared to the size of the market. The amount of $24 million can finance a certain number of housing loans, but it is not enough alone to cause a wide boom in a real estate market whose value before the crisis was estimated at billions of dollars annually.”
It also indicates the continuing crisis of confidence in banks, as the majority of the Lebanese are still conservative towards long-term borrowing due to previous banking experience and the lack of clarity about the future of the financial sector yet.”
He also talks about the weakness of purchasing power. Despite the improvement of some monetary indicators compared to the years of severe crisis, the real incomes of many Lebanese families remain below levels before the financial crisis, which consequently limits the number of those eligible to benefit from loans.
He points out that the market currently relies on “fresh dollars.” Since the financial and banking crisis, the important part of sales operations has become more dependent on cash liquidity in dollars and remittances from expatriates than on bank financing.
The real estate expert stresses that “recovery in the real estate market requires a set of simultaneous factors, including: expansion of housing financing programs, longer-term economic and monetary stability, reform of the banking sector, improvement in income and job opportunities, and the return of confidence in long-term investment in Lebanon.”
He considers that “this payment is a positive signal and important support for the housing sector in Lebanon, and may lead to a noticeable increase in the number of residential transactions within the middle categories, but it is not sufficient alone to completely pull the real estate market out of recession.”
It must also be noted that the General Housing Authority in Lebanon stopped processing loan applications completely in 2019, after commercial banks stopped providing housing support loans based on the decisions of the Bank of Lebanon, and they are still stopped today.
As for the current prices of apartments in Lebanon, they certainly vary greatly from one region to another, but prices may start from 100 thousand dollars and may reach 750 thousand dollars.
In conclusion, the Lebanese citizen, especially the youth, is still waiting for the financial crisis to be resolved once and for all, the return of bank loans, and improved salaries to buy a “dream house.”
