Property sales dwindle

Fewer building permits registered in first quarter

The total area of construction permits registered in the first three months of the year amounted to 2.8 million square meters (sqm), down by 22 percent compared to the same period of 2012. The area of construction permits in the first quarter of 2012 had already dropped by eight percent compared to the previous year.

Marwan Hamadeh, President of Sogetim, a local brokerage firm, said: “Developers are making less profit because land prices are going up and the cost of built-up area is becoming closer to the price of sale.”

Mount Lebanon accounted for the highest registered area with 1.26 million sqm in Q1 2013, down by 37 percent year-on-year. The North totaled 630,000 sqm, up by 13 percent year-on-year. Construction permit area in the Bekaa amounted to 298,000 sqm with a 15 percent growth. The South recorded a drop of 19 percent to 259,300 sqm. Nabatieh accounted for 244,400 sqm, a 24 percent increase. Hamadeh said: “Developers and expatriates are buying lands in the South and Bekaa as an investment because they believe prices there will rise.”

Beirut had the lowest total levels of new construction area, totaling128,300 sqm, a 53 percent decrease year-on-year. The area of building permits in Beirut has been shrinking for the past few years. “Beirut is too expensive and this has been reflecting on its suburbs, which in turn become too expensive to live in,” said Anis Kfoury, General Manager of Nine Yards, a real estate brokerage firm. He said that even relatively inexpensive residential units along the northern coast and suburbs are too expensive for local home buyers.

The number of permits in the first quarter fell by seven percent year-on-year to 3,260 excluding permits registered by the Order of Engineers in the North.

The number of sales transactions in the first quarter of 2013 reached 13,918, down by 17 percent compared to the first quarter of last year. “The drop is driven by the fact that expatriates have been cutting down on buying residential units,” Hamadeh said.

The number of sales transactions was highest in Baabda (2,944), followed by the North (2,291), Keserwan (1,763), Zahle (1,650), Metn (1,481), Nabatieh (1,230), the South (1,246), and Beirut (838). Transactions are registered according to regional real estate offices and do not necessarily coincide with cazas or governorates. Hamadeh said demand has decreased and is now more focused in the overcrowded areas of Metn. “In such areas, zoning does not allow as much construction as in the capital and thus land prices are cheaper,” he said. Sales to foreigners totaled 219 transactions, dropping by 35 percent year-on-year. “Most buyers are local residents who request subsidized housing loans for apartments below $500,000,” said Hamadeh.

Kfoury said: “Over the past years, supply has been directed towards expatriates and foreign nationals who are not currently buying.”