The Bank has also decided to provide credit facilities that cover up to 60 percent of the value of the loan, up from 40 to 50 percent at present.

Joseph Sassine, chairman of the bank said that the bank’s decision to raise the level of funding will help reduce the self-financing burden on borrowers. “People are already heavily-indebted with many consumer loans ... Through this decision we aim to better tie expatriates to their homeland,” he said.

Elie Zgheib, a broker at Cold-Well Banker Lebanon, said that the bank’s step to offer financing that covers up to 60 percent of any real-estate loan will “boost demand for property from expatriates.” He said this step will also help accelerate the economic activity in the country as people will be given a longer period to repay their debts which will trigger them to inject money in investment projects.

The move also comes as the Housing Bank, a bank partially owned by the state, seeks to tackle the increase in real-estate prices. “Prices are rising dramatically,” Sassine said. According to the chairman, prices of real-estate in Beirut have touched record levels and became even higher than prices in some European cities including France’s Marseille, and Toulouse.

The bank also decided to facilitate loan conditions for expatriates who are willing to borrow to reconstruct their houses. It has upped the ceiling on such loans to LL200 million ($133,000) from LL 150 million ($100,000).

Demand is high for real-estate loans, said Zgheib. In the Metn and Keserwan areas, 70 percent of loan applications come from expats especially those who reside in Africa and the United States, he said. Zgheib said that the price range demanded by the expats is $250,000 to $450,000. Some demand has been seen from foreigners as well, including European and US citizens who mostly ask for villas and chalets but not for apartments, the broker said.

As for demand from Lebanese living in the Gulf, Zgheib said “it is low.” But Sassine disagrees. According to the chairman, the highest demand for the housing bank’s loans is from Lebanese living in the Gulf!

In 2009, the Housing Bank has provided some $83 million in loans, and Sassine expects this number to double in 2010 to $166 million. The Habitat Bank is a Lebanese shareholding company partially owned by the State (27 percent), the National Social Security Fund (NSSF) (37 percent), the rest is held by a number of local banks.