This article is part of ongoing Executive coverage with members of the Lebanese Private Sector Network on sectoral impacts of and responses to the 70-day September 2024 war on Lebanon.
In the wake of devastating strikes that have turned bustling neighborhoods into craters and thriving homes, enterprises, and shops into rubble, the future of housing and real estate in Lebanon requires a major focus on reconstruction with a forward-thinking eye for sound and environmentally tenable urban development and planning. From rural homes and farms to multi-family high-rises in Beirut, the scars of destruction are everywhere, leaving questions about recovery, stability, funding for repair and reconstruction. Larger questions of what comes next for the country’s urban and residential landscapes are fraught, given the shaky state of the 60-day ceasefire and Lebanon’s central positioning between one hostile neighbor to the south and another north-western border neighbor currently experiencing massive upheaval with international powers eager to reshape the country according to their interests.
In this interview, Mireille Korab, Director/Head of Business Development at FFA Real Estate who is a leading figure in Lebanon’s real estate sector, discusses the profound challenges and opportunities that define the industry amidst a backdrop of war, economic instability, and political uncertainty. Over the years, the sector has faced a cascade of disruptions—from a slowdown in 2015 to the halt of subsidized loans in 2017, and the compounded impacts of the 2019 financial crisis. These longstanding issues have been further strained by the recent war, which has brought many planned projects to a standstill.
Korab explores how the market has adapted, highlighting the resilience of developers and the strategic moves of buyers with high purchasing power. Despite the setbacks, she identifies silver linings and investment opportunities, emphasizing the sector’s potential as Lebanon moves toward stability. The conversation delves into the critical role of reconstruction and urban planning, advocating for sustainable development and strategic collaboration between the private and public sectors.
While the real estate market is in flux, Korab’s insights shed light on the path forward, underscoring the readiness of the private sector to contribute to rebuilding efforts and seize future opportunities in Lebanon’s evolving landscape.
Executive: Are there any ongoing real estate purchases despite the war?
Korab: Yes, but only in isolated cases. Before the war, a lot of developers were starting to plan new projects and were advertising a few new developments. Everything stopped, even though in the areas that were not affected directly by the strikes, there were people interested in buying. Wealthier individuals with high purchasing power seized opportunities to buy properties in unaffected areas. However, this was not reflective of a healthy market, not a full-fledged market but more of one-off transactions.
Definitely, we saw a huge rise in the rental prices, because a lot of people were leaving Beirut, leaving other areas closer to the strikes, and we had a surge in the rental prices. This is not healthy because there was limited availability yet a lot of demand, and also a discrepancy between the pricing and the purchasing power. So, again, we were in a very unstable situation for the past 60 days, 66 days. And now everything is on hold, waiting for the ceasefire to be permanent because it’s just a halt now.
So, there are no new projects at the moment. The new projects will start after January, hopefully, once everything is settled and a new president is elected, only then will the market go back to running smoothly.
Executive: What types of properties were most in demand during this time?
Korab: Luxury properties, such as villas in mountainous regions and chalets near the beach, attracted buyers looking for long-term investments. However, these were limited to high-end markets.
Executive: Is this a good time to invest in real estate?
Korab: Yes. Property prices are discounted by 25-30 percent and are expected to rise once stability returns, particularly after a ceasefire and political resolution. It’s a good time to buy. It’s a buyer’s market; it’s not a seller’s market.
Executive: Do you foresee significant investment opportunities post-war?
Korab: if the ceasefire is permanent, we will witness good days ahead in the sector. The reconstruction phase will bring immense opportunities, especially with international support. However, this requires political stability and proper urban planning.
Executive: What are the plans for reconstruction and urban development?
Korab: You have more than 100,000 units destroyed. The focus should be on sustainable and planned reconstruction, avoiding mistakes of the past. There’s a push for creating green areas and adhering to modern urban planning standards to ensure a better future.
Executive: How involved is the private sector in reconstruction planning?
Korab: The private sector is ready to collaborate with the government to contribute to reconstruction efforts. Real estate developers are advocating for a seat at the planning table to ensure effective and sustainable rebuilding. I’m the vice president of the Real Estate Developers Association and we are demanding proper urban planning on the government’s part. We [the private sector] know how to tackle the reconstruction. So we are demanding a seat in the process of reconstruction. And we will be there hand in hand to help the public sector to have it as it should be.
Executive: What are your expectations for the market once stability is restored?
Korab: Prices will likely return to their 2015 levels and continue to rise. Rental prices, which surged during the war, will also stabilize as displaced individuals return to their homes.
Executive: Do you have any final thoughts or advice?
Korab: It’s always a good time to invest in Lebanon’s real estate market, particularly now with favorable prices. The sector has resilient potential and will thrive with proper planning and political stability.
