Bottoming out

Will real estate prices be dragged down further by a worsening economy?

by Gareth Smith September 10, 2000

written by Gareth Smith September 10, 2000

T he optimism following the Israeli withdrawal is wearing thin. Although some property prices have fallen up to 50% from the peaks of 1995-6, most analysts and practitioners fear that the market has yet to bottom out. Bernard Mouchbahani, senior manager of project finance at Lebanon Invest, is just one who thinks prices are too high: “We are still overvalued when you look at the state of the economy and what property costs in the rest of the world.” Despite prices that are high compared with Dubai, Abu Dhabi or Istanbul (see table), there is a crucial oversupply in many sectors of Lebanon’s real estate market. Even if the economy were to pick up, there is a huge slack to be taken up, says economist Marwan lskandar: “Eighteen percent of residential is unoccupied, as is 20% of nonresidential. The total investment in these properties could be around $6-7 billion, and

Gareth Smith

Gareth Smith was a distinguished journalist who reported from the Middle East for over two decades. He served as the Financial Times correspondent in Tehran, where he was the chief Iran correspondent from 2003, following his earlier role as Lebanon correspondent. Throughout his career, Smith covered Middle Eastern affairs for leading media outlets, including The Financial Times, The Guardian, and the BBC. He also contributed as an editor to Executive magazine. His work as a freelance journalist in the 1990s, focusing on the politics of Iran and Iraq, paved the way for his appointment at the FT. In 2009, he relocated to the west coast of Ireland, where he balanced freelance journalism with his passion for nature and the land.

Bottoming out

Will real estate prices be dragged down further by a worsening economy?

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