Lebanon’s real estate sector booming despite financial crisis – The National

Lebanon’s real estate sector booming despite financial crisis – The National

The real estate bubble won't last with available property already drying up, experts say

A billboard advertising property, in the area of Safra, north of Beirut. AFP

Like most Lebanese expatriates who placed their life savings in their home country, Elias, a sales manager in Dubai, panicked when Lebanese banks started enforcing capital controls on cash withdrawals last November. Rumours were swirling that the cash-strapped government would resort to a haircut on deposits.

Desperate, many Lebanese wrote checks to transform their money stuck in the bank into tangible assets they did not need, triggering an artificial boom in the real estate sector, which had been sluggish for years.

First, Elias bought a Rolex watch. Then, he purchased land in his home village. Finally, early in June, he bought a bigger flat in the capital and sold his old one.

This allowed him to reduce the balance on his dollar bank account from over a million dollars to just under $500,000, said Elias, who asked for his real name not to be published. He had also been eyeing an off-road sports car, but importers had run out.

Government officials, who are negotiating with the IMF for a bail-out deal, have hinted that should a haircut take place,