Lebanon housing index gains amid hopes for loan subsidies

The answers in the first quarter of 2019 show that 6.3 percent of Lebanese residents had plans to either buy or build a residential property in the coming six months, up from 5.8 percent in the fourth quarter of 2018 and compared to 3.75 percent in the first quarter of 2018.
by Annahar Staff

8 May 2019 | 11:14

Source: by Annahar

  • by Annahar Staff
  • Source: Annahar
  • Last update: 8 May 2019 | 11:14

The average 120 square meter executive apartment with separate bedroom, washroom, shower, washer, dryer. (Annahar Photo)

BEIRUT: The Byblos Bank real estate index posted a monthly average of 56.1 points in the first quarter of 2019, a nearly 10 percent increase compared to the final quarter of last year.

The index is based on a survey of people planning to buy or build a house in the coming six months. 

Commenting on the results, Nassib Ghobril, Chief Economist and Head of the Economic Research and Analysis Department at the Byblos Bank Group, said: “Real estate demand increased in the first quarter of the year after Banque du Liban launched its USD 1.1 billion economic stimulus package for 2019 that includes LBP 790 billion, or about USD 524 million, in subsidies for housing loans.”

He noted that “LBP 490 billion will support mortgages in 2019 that commercial banks subsidized from their own funds in 2018, while LBP 300 billion will subsidize new mortgages this year. As a result, banks have started to utilize the facility, which is meeting part of the demand for housing. Further, the stimulus package includes an additional amount for subsidized mortgages to expatriates.”

Ghobril indicated, however, that “the housing market requires additional measures to stimulate demand, as the Index’s average monthly score in the first quarter of 2019 came 57.2 percent lower than the peak of 131 points registered in the second quarter of 2010, and remained 49 percent below the annual peak of 109.8 points posted in 2010. It was also 5.8 percent lower than the Index's monthly trend average score of 59.5 points since the Index’s inception in July 2007.”

As such, Ghobril pointed out that ''Banque du Liban, in cooperation with commercial banks, has subsidized interest rates on housing loans since 2009. These measures were supposed to be temporary to give the executive branch enough time to develop a housing policy.''

He added: “it is clear that citizens have more confidence in Banque du Liban’s initiatives than in the politically-motivated promises that they heard throughout last year from various political sides. However, it remains the responsibility of the executive branch to not only cover interest subsidies on housing loans for limited-income citizens, but also to take the lead in developing a comprehensive housing policy that stimulates demand for all segments of the residential market in Lebanon.”

The answers of respondents to the Index's survey questions in the first quarter of 2019 show that 6.3 percent of Lebanese residents had plans to either buy or build a residential property in the coming six months, up from 5.8 percent in the fourth quarter of 2018 and compared to 3.75 percent in the first quarter of 2018.

In comparison, 6.7 percent of residents in Lebanon, on average, had plans to buy or build a residential unit in the country between July 2007 and March 2019, with this share peaking at nearly 15 percent in the second quarter of 2010.

The Index is based on a face-to-face monthly survey of a nationally representative sample of 1,200 males and females living throughout Lebanon, who reflect the demographic, regional, religious, professional and income distribution of Lebanon.

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