Lebanese real estate strong but softening

ENAR

Lebanon’s housing market has boomed in the last two years. On the back of a robustly growing economy and large inflows of foreign capital, both housing investment demand and supply increased markedly. Relatively sound fundamentals With the economy still growing, Lebanon’s property markets continued to perform well. Demand for Lebanese residential properties remained relatively strong in 2009. As illustrated by the high foreign direct investment (FDI), foreign investors as well as Lebanese expatriates continued to invest in residential properties despite the global economic turmoil. Concurrently, housing demand from domestic buyers was elevated. According to Bank Audi’s estimates, the number of property sales increased by about 2.3 percent to 83,622 transactions in 2009, compared to 22 percent year-on-year in 2008. Mortgage lending continued to expand. Housing loans increased by a staggering 41 percent year-on-year in the second quarter of 2009 (see table inset below), partly because of low interest rates. On