The Real Estate sector has played an important role in developing the economy of Lebanon. It was able to withstand the recent global crisis that engulfed the global markets and beckoned the dawn of economic recession. It has been observed by the analysts that the demand the sector has been consistent and unending. The growth for the sector has come from an increase in the number of Lebanese and Non- Lebanese households, and also from an increased shifting of Arabs to Lebanon. The real estate sector of Lebanon has been strictly regulated that has prevented the entry of new entrants.
The regulating authorities for the sector in Lebanon are really strict and have inhibited the growth of this market in this country. The real estate investments are usually huge and require huge financing but the Central Bank of Lebanon has other ideas. It is ready to pay only 60 percent of the required amount and also demands the collateral, which is a big hurdle. The determining factors of the real estate investments are the purchasing power and the likings for accommodations.
The real estate market is unique and has certain specific features; the investors are not taxed for their capital gains, which is rare according to the global trends. In addition to this the optimism associated with the sector and the recent performance has led to the development of the market. The demand for real estate in Lebanon is showing increasing trends, which has led to the development of numerous opportunities for the real estate investors. These opportunities are waiting to be en-cashed by the big investors because they are the only people who can afford the huge investments required for the sector. The lower cost of capital for raising the housing loans is also big opportunity in Lebanon that should be grabbed with both hands.
Although, the opportunities are numerous but there is also a threat from the decline in the real estate prices. The sector has also been historically associated with numerous social and political risks that are to be tamed. There is a huge inconsistency in the income and expenditures of the Lebanese people that might lead to lowering in demand for these properties. Furthermore, there is a definite chance of increase in real estate materials because the prices for these are due to the market. Thus, an investor should be aware of the market forces that can affect his desired profits. The health of real sector in Lebanon is also proportional to the world markets because it has a direct impinge on the foreign investments into the sector in Lebanon.
Sluggishness or uncertainties which are seen on global arena can also affect real estate business and can be a problem for foreign investors. Real estate is also very prone to any worsening political situation which happens in any country. The political stability of any nation is must as many foreign investors may not find feasible to invest in a country with low political stability.
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Source: http://realestatelately.com/2974/all-you-wanted-to-know-about-real-estate-lebanon
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