07 October 2007

Beirut housing sector rides out crises

BEIRUT -- Despite Lebanon's long-running political-and-economic crises on top of the Israel-Hezbollah war of 2006, new buildings are shooting up on the capital's skyline even if sale volumes have fallen.

"With all that Lebanon has lived through since the assassination of [former prime minister] Rafiq Hariri in 2005, we had expected the market to shrink," admitted Guillaume Boudisseau, a consultant with the Ramco real-estate company.

"Not only has the market remained stable, but construction sites are progressing quickly and [property] prices have increased by more-than-50 percent in two years," he maintained.

Boudisseau said more than 200 new projects were currently under development in the capital, including luxurious residential skyscrapers with names like "Sky Homes," "Dream Bay," and "Platinum Tower."

Lebanon has been in turmoil since Hariri's murder that has triggered a political paralysis between the Western-backed government and the pro-Syrian opposition. The two sides are now deadlocked over choosing a new president.

The country's infrastructure was extensively devastated during last year's war between Israel and the Lebanese-Shiite militant group Hezbollah.

Construction permits in Beirut and the northern region of Tripoli totaled 3.17-million square meters (34- million square feet) in the first five months of the year, down by a significant 39.9 percent compared to figures from the same period of 2006, according to the latest quarterly report of Audi Bank.

"Real estate and construction activity were influenced during the first half of 2007, by the overall intricate political conditions and by the inflation of building materials, with mega-realty developments slowing down," it said.

But despite the downward trend in construction, Boudisseau said "there is a surprising wind of optimism among contractors, even if they know that the appetite of Gulf clients has shrunk since the last war and that the volume of sales is less than before" the war erupted in July 2006.

Central bank governor Riad Salameh said the continued interest in real-estate was partly due to the fact that property values in Lebanon were lower than in neighboring countries.

"Recently, prices in Beirut have become lower than in Damascus or Amman. It's a good argument to use with clients: 'Come invest here, it is now that you should buy,'" said Boudisseau.

"The cost per square meter in Beirut is between $1,000 and $4,000, which is significantly less than in Damascus and Amman," he said.

Real estate agent Christian Baz said in Lebanon you can buy a 300-square-meter apartment for $600,000.

Despite the decrease in sales, real estate agents have refused to lower property prices in the hope that a solution to the political crisis will spur further activities in the sector.

"Developers have maintained their prices, and some have even increased them. They think that if a new president is elected, they will benefit from a rise in prices, or that, in the worse case scenario, the market will be stable," Boudisseau said.

The hike in prices was mainly due to the shortage of available land in the country's overcrowded capital and to an increase in the cost of labor and building materials.

Boudisseau said the Lebanese diaspora - which far exceeds the local population of about 3.7 million - represents "more-than-50 percent of the clients" in the real estate sector.

Salameh said Lebanon's ailing economy - which suffers from a gigantic debt of $40.5 billion - largely depends on annual remittances by Lebanese expatriates of about-$5 billion.

"They are the ones who are driving the [real estate] market, because whether there is a crisis or not, they want a pied-a-terre in Lebanon," Baz said.

He said that the market has learned to absorb shocks. "Two-or-three-months after an attack, or even a war, business is back to normal. It is like a miracle," he said.-(me.times)

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Lebanon Time-Line

Introducing Lebanon

Coolly combining the ancient with the ultramodern, Lebanon is one of the most captivating countries in the Middle East. From the Phoenician findings of Tyre (Sour) and Roman Baalbek's tremendous temple to Beirut's BO18 and Bernard Khoury's modern movement, the span of Lebanon's history leaves many visitors spinning. Tripoli (Trablous) is considered to have the best souk in the country and is famous for its Mamluk architecture. It's well equipped with a taste of modernity as well; Jounieh, formerly a sleepy fishing village, is a town alive with nightclubs and glitz on summer weekends.

With all of the Middle East's best bits - warm and welcoming people, mind-blowing history and considerable culture, Lebanon is also the antithesis of many people's imaginings of the Middle East: mostly mountainous with skiing to boot, it's also laid-back, liberal and fun. While Beirut is fast becoming the region's party place, Lebanon is working hard to recapture its crown as the 'Paris of the Orient'.

The rejuvenation of the Beirut Central District is one of the largest, most ambitious urban redevelopment projects ever undertaken. Travellers will find the excitement surrounding this and other developments and designs palpable - and very infectious.

Finally, Lebanon's cuisine is considered the richest of the region. From hummus to hommard (lobster), you'll dine like a king. With legendary sights, hospitality, food and nightlife, what more could a traveller want?

Introducing Beirut

What Beirut is depends entirely on where you are. If you’re gazing at the beautifully reconstructed colonial relics and mosques of central Beirut’s Downtown, the city is a triumph of rejuvenation over disaster.

If you’re in the young, vibrant neighbourhoods of Gemmayzeh or Achrafiye, Beirut is about living for the moment: partying, eating and drinking as if there’s no tomorrow. If you’re standing in the shadow of buildings still peppered with bullet holes, or walking the Green Line with an elderly resident, it’s a city of bitter memories and a dark past. If you’re with Beirut’s Armenians, Beirut is about salvation; if you’re with its handful of Jews, it’s about hiding your true identity. Here you’ll find the freest gay scene in the Arab Middle East, yet homosexuality is still illegal. If you’re in one of Beirut’s southern refugee camps, Beirut is about sorrow and displacement; other southern districts are considered a base for paramilitary operations and south Beirut is home to infamous Hezbollah secretary general, Hassan Nasrallah. For some, it’s a city of fear; for others, freedom.

Throw in maniacal drivers, air pollution from old, smoking Mercedes taxis, world-class universities, bars to rival Soho and coffee thicker than mud, political demonstrations, and swimming pools awash with more silicone than Miami. Add people so friendly you’ll swear it can’t be true, a political situation existing on a knife-edge, internationally renowned museums and gallery openings that continue in the face of explosions, assassinations and power cuts, and you’ll find that you’ve never experienced a capital city quite so alive and kicking – despite its frequent volatility.