|Construction fever sweeps Lebanon
|Gulf-driven surge 'will help economic growth'
Demand for land in Lebanon has reached unheard-of proportions as the area under new building permits rose by 81.6 percent, or 3.7 million square meters, in the first quarter of 2006 compared to 24.7 percent, or 2.04 million square meters, last year.
This data was revealed on Tuesday in a report issued by the Order of Engineers, the authority that issues building permits.
The president of the authority, Samir Doumit, said investors in real estate have put down an additional $1 billion in the first quarter of 2006, of which 25 percent comes from Gulf investors.
"This increase in real estate investments indicates that this sector is further expanding and will help the economic growth and create employment opportunities," Doumit said during a press conference at the Order of Engineers on Tuesday.
He said that every one million square meter creates around 25,000 job opportunities.
The group's report showed that growth in area covered by building permits varied by region, with the strongest surge in Mount Lebanon at 117.7 percent and the weakest in North Lebanon at 35.9 percent. In Beirut permitted area grew at a reported at 85 percent.
The report revealed that almost 71 percent of land purchases were in Mount Lebanon - mainly in the Baabda, Aley and Metn regions - and 94 percent of these purchases were made by Gulf investors. U.A.E. investors led the group, followed by Kuwaiti, Saudi and Qatari investors.
Doumit said that of the 160 new building permits for private residences in Mount Lebanon, 95 permits are for Gulf investors.
Doumit said the rush on property reflects huge liquidity in the Arab region from high oil prices. Investors gravitate to Lebanon, long a favored destination in the Middle East.
Lebanon abolished limits on foreign ownership in 2001.
Doumit said the international community's and especially Saudi Arabia's support of Lebanon's political process indicates the country is recovering and re-emerging with a strong economy.
He cited Lebanese expatriates' increased disposable income and larger savings as further drivers of the hot property market.
Doumit urged politicians to sustain this situation of growth in the real estate sector by providing stability and security for Lebanese and Arab investors.
"There is a real opportunity for economic growth now before Lebanon. Politicians should take these figures into consideration and they will be held responsible for any decrease," Doumit said.
But this growing appetite for Lebanon's land and properties comes at a heavy price as land prices in Beirut alone increased by 40 to 50 percent in the first quarter of 2006, according to a study conducted by Ramco, a real-estate consultancy firm.
The study showed that prices for buildable areas in Achrafieh rose on average from $350 per square meter to $500, in Clemenceau area prices jumped from $400 to $600 and in Jnah from $400 to $700.
Prices in Solidere, the major driver for Beirut prices, rose from $1,100 in 2004 to $1,500.
The study said that the rise in land prices has been constantly supported by the end-user as demand for new apartments seem to be still strong.
Doumit said that permits for around 1000 luxury apartment were issued since the beginning of this year in Beirut and Mount Lebanon.
The Daily Star