After the July 2006 War, the prices of the real estate market in Beirut have witnessed an instability period. While no decrease had been observed during the following months, prices had been stabilized according to the slow down of the demand. However, prices have increased again since spring 2007.

A few days before the presidential elections, the situation is paradoxical. The country is in real danger, and despite everything, a strong pressure is being made on prices. Many factors explain this phenomenon:

• The Lebanese expatriates’ appetite remains constant. Without this financial basket, the market would almost be at a slow pace. As we regularly explain, most of the under-construction apartments are sold to expatriates and Lebanese who work abroad. Many of those buyers have a comfortable professional situation at their disposal and are ready to pay a great amount of money for a good-quality product. Their priority is to own a decent pied-à-terre to live in yearly for a few days. This is a long-term strategy that is not directly affected by the recent political and law-and-order problems. Moreover, those buyers are well informed about the market in the West or in the Gulf countries, and they know very well that a dwelling in Beirut is still affordable.
• The properties are also demanded a lot by property developers and investors. Therefore, demands exceed offers. Many expatriates, who cannot invest in the country where they work, prefer to repatriate their capital in order to replace it in their motherland. Some areas near Beirut are totally monopolized by the Diaspora’s money. The infatuation is that the impacts of lands are remarkably increasing.
• There aren’t so many available parcels in Beirut. This rarity accentuates the increase of available parcels value. The market is full of unstable owners who want to buy one day, then, change their minds the other day, or who increase prices every time they get an offer. Those charlatans pollute the sector by playing with the prices, the intermediates, and the potential clients.
• The arrival of the new president that we are all waiting for also affects the market. Many people are in a rush to buy before any eventual increase, if a political solution is found. In the opposite case, they are taking a risk, but at the same time, they are ready to take it. Many owners are in the waiting period and refuse to sell their goods hoping that a more important profit will be made after the elections. This logic is now paralyzing any eventual transaction.
• The surge in Euro and in construction costs has caused an increase in the apartments’ prices. Globally, the growth rate would go from 5 to 20%, according to the projects and areas since summer 2007. This chain effect has forced the most part of property developers to readjust their tariffs during the last few weeks. The highest pitch is that some of them have done it after a long period of non-selling. Now, one can barely find products with stable or even decreasing prices, except for dwellings which are badly conceived and unsuited to the market.