The conventional wisdom of the Lebanese real estate market, and I’m sure the readers of this magazine have heard it a million times, is: “The value of real estate never goes down.” Making it the undisputed bulletproof investment or saving tool that we have adopted through generations.
Our real estate industry is accustomed to riding out political and socio-economic crisis, tends to plateau during difficult times before picking up again once geopolitical forces give Lebanon a new role to play. Real estate developers have the habit of licking their wounds and tightening their belts during these plateau periods to weather the storms.
However, the current crisis in real estate that started in spring 2010 has been persistent much longer than any real estate developer can endure. Amplified with their indebtedness and coupled with our government’s disrespect to our sovereignty—which continues to fail in minimizing the external, or their internal selfish bickering effect—have pushed real estate developers to take measures and enact manners that have never been witnessed before.
Prices are being slashed and corporates are imploding from within, vaporizing the value of our assets and estates along. In the absence of a progressive fiscal policy, the central bank was left alone to devise ingenious incentives to sustain the demand for real estate and keep the industry afloat.
However, the central bank today, in the midst of yet another political deadlock, is unable to continue supporting the Lebanese economy beyond reasonable expectations. The real estate industry is left to figure out a way to survive on their own. We believe in the entrepreneurs and business acumen of the Lebanese private sector. Patience may spread thin, but we remain confident in their ability to overcome current setbacks.