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Last Updated: Dec 20, 2016




After two years of house price falls, Lebanonís property market is improving. House prices are now rising. Demand is also increasing gradually. This is a bit surprising given Lebanon's timid economic growth, continued domestic political bickering and the ongoing war in neighboringSyria.

During the year to end-Q3 2016, the average value of property transaction in Lebanon rose by 4.71% to US$133,446 from a year earlier, according to the Directorate of Real Estate and Cadastre.

By region:
  • Beirut, which has the most expensive housing in Lebanon, saw its property prices rising by 5.63% y-o-y in Q3 2016, to an average of US$538,546
  • In Metn, property prices rose by 3.81% during the year to Q3 2016, to US$213,350
  • In Baabda, property prices increased 11.7% y-o-y in Q3 2016 to US$150,474
  • In Kesserwan, property prices fell by 11.09% y-o-y to an average of US$124,628

During the first ten months of 2016, the number of property sales in Lebanon increased 1.2% y-o-y to 51,707 units, according to the Directorate of Real Estate and Cadastre. Likewise, the value of property sales transactions also rose by 2.9% y-o-y to LBP10 trillion (US$6.65 billion)over the same period.

The Lebanese property market saw an average annual growth of 18% (13% inflation-adjusted) from 2009 to 2013, before slowing sharply due to regional political turmoil.
  • In 2009, average property sales prices rose by about 48.4% y-o-y  (43.5% inflation-adjusted)
  • In 2010, average property sales prices increased by 7.37% y-o-y (2.7% inflation-adjusted)
  • In 2011, average property prices rose by 9.8% y-o-y (6.5% inflation-adjusted)
  • In 2012, average property prices rose by 6.25% y-o-y (-3.51% inflation-adjusted)
  • In 2013, average property sales prices rose by 16% y-o-y (14.7% inflation-adjusted)
  • In 2014, average property sales prices dropped 1.61% (-3.87 inflation-adjusted)
  • In 2015, average property sales prices dropped slightly by 0.8% (increased 3.1% inflation-adjusted)

House prices in several areas of Lebanon doubled from 2008 to 2012, mainly due to increased demand from GCC investors after the oil price surge in 2008.

However since then prices have slumped.† In addition, the Lebanese economy grew by just 1% in 2015, after GDP growth of only 2% in 2014, 2.5% in 2013, 2.8% in 2012 and 0.9% in 2011, based on figures from the International Monetary Fund (IMF). The Lebanese economy remains weak, with projected GDP growth of just 1% this year.

Lebanon price annual change graphSurprisingly, tourism improved in the past two years. The number of tourist arrivals rose by 12.1% y-o-y to 1,518,000 persons in 2015, after rising by 6.3% the previous year. The number of tourist arrivals dropped by an average of 16% per year from 2011 to 2013.

Foreign ownership of real estate property is allowed in Lebanon. Foreigners can acquire up to 3,000 square meters (sq. m) of land. For properties bigger than this, a prior decree from the Council of Ministers is needed. Foreigners can only own up to 3% of the total land area of Lebanon, except in Beirut, where foreigners can acquire up to 10% of the city's total area.

Analysis of Lebanon Residential Property Market »


RENTAL YIELDS
Last Updated: Oct 14, 2013



It is really amazing how much things have changed.† Six years ago, when we first set out to look at rental returns in Lebanon, gross rental yields averaged 10% to 11%.

In 2013, you would be lucky to receive a return of 4.5% on your property, and larger properties will yields less, at 3.5%.

Central Beirut apartments are now, in 2013, priced at around US$3,700 to US$4,700 per square metre.

When we did our first survey in 2004, prices averaged around US$1,200! So prices have risen a lot, which explains the much lower yields.

Round trip transaction costs are low in Lebanon.†† See our residential transaction costs analysis for Lebanon and Residential property transaction costs in Lebanon compared to the continent.

Read Rental Yields  »



TAXES AND COSTS
Last Updated: Mar 15, 2016



Rental Income: Net rental tax is taxed at progressive rates, from 4% to 14%.

Capital Gains: There are no capital gains taxes.

Inheritance: Inheritance taxes are levied at progressive rates from 3% to 45%.

Residents: Residents are taxed on Lebanese-sourced income and foreign-sourced income from movable income at progressive rates. Ddifferent set of tax bands and tax rates apply to business income and employment income.

Read Taxes and Costs  »



BUYING GUIDE
Last Updated: Mar 11, 2015



Round-trip costs, i.e., the total costs of buying and selling a property, amount to around 5.90%. This includes the 5% transfer tax. Some fees can be avoided, for instance, if a lawyer is not hired, and/or if the property is registered directly with the Land Registry, without going through a notary public.

Read Buying Guide  »



LANDLORD AND TENANT
Last Updated: Dec 02, 2007



Lebanese rental law is neutral between landlord & tenant.

Rent: Rents can be freely agreed between landlord and tenant for contracts signed after 23 July 1992.

Tenant Security: The tenant who signs a one-year contract has the right to hold on to the property for three consecutive years. Thereafter, the landlord is entitled to end the contract, or to renegotiate.

Read Landlord and Tenant  »



ECONOMIC GROWTH
Last Updated: Dec 20, 2016


Conflict-stricken economy

Lebanon beirut houses and propertiesLebanon (pop. 4.1 million; GDP/cap US$11,067) is one of the most complex and divided countries in the Middle East.

Lebanon's religious communities maintain a watchful equilibrium. To maintain the balance of power between religious groups, the president must be a Maronite Catholic Christian, the prime minister a Sunni Muslim, the deputy prime minister an Orthodox Christian and the speaker of parliament a Shiía Muslim. The 128 parliamentary seats are equally divided between Christian and Muslims.

The countryís economy was ravaged during the Lebanese Civil War from 1975 to 1990. From the 1990s to the early-2000s, there was an uneasy calm, with external forces and militant groups occupying different parts of the country.

In 2005, former Prime Minister Rafik Hariri was assassinated. Then in July 2006, the Israel-Hezbollah War erupted, which caused large-scale damage to Beirut, undoing much of the good work done in the post-Civil War reconstruction programme. In May 2007, the violent Nahr al-Bared conflict, the most severe internal fighting in almost two decades, exploded and ravaged some parts of the country.

Finally in May 2008, the Doha Accord marked the end of an 18-month long political crisis. Local political and security conditions improved considerably, with the Lebanese government determined to pursue reforms focused on achieving economic revival, sustainable growth and political stability.

The political stability in the country helped the economy grow strongly, with an average annual GDP growth rate of 9.2% from 2007 to 2010.

Lebanon gdp inflationHowever the Syrian conflict that erupted in March 2011 spilled over into Lebanon, causing deadly clashes between Sunni Muslims and Alawites in Tripoli and Beirut. Lebanonís economy slowed sharply, with GDP growth rates of just 0.8% in 2011.

Political tensions brought down the government of Prime Minister Saad al-Hariri in January 2011. He was succeeded by NajibMikati, whose cabinet is dominated by Hezbollah and its allies.

In June 2011, the UN issued arrest warrants for four members of Hezbollah in the murder of former PM Rafik Hariri. Hezbollah was uncooperative and refused to allow any suspects to be arrested. Tensions were exacerbated by the Arab Spring which began in December 2010.

By mid-2012, the Syrian conflict which began in March 2011 had spilled over into Lebanon in deadly clashes between Sunni Muslims and Alawites in Tripoli and Beirut. This raised fears that Lebanonís already fragile political truce could collapse again into sectarian strife. The number of Syrian refugees in Lebanon rose to over one million in April 2014 from about 700,000 people in September 2013. With a population of just 4.5 million, this means that one in every five people in the country is a Syrian refugee. This has placed a severe strain on the country's resources.

Then in March 2013, NajibMikatiís government resigned amidst political tensions over upcoming elections. General elections, due last November 2014, were put on hold until 2017 due to security concerns over the conflict in Syria.

Economic growth has slowed sharply in the past four years, with annual GDP growth rates of just 1% in 2015, 2% in 2014, 2.5% in 2013, and 2.8% in 2012.

In October 2016, Michel Aoun was elected by parliament, ending a political stalemate that left Lebanon without a head of state since May 2014.







  • High yields in Beirut
  • Low rental income tax
  • Moderate transaction cost
  • Unstable security situation
  • Minor ownership limits
  • Heavily damaged by attacks
RESIDENTIAL PROPERTY FACTS
Price (sq.m): $3,693 For a 120 sq. m. property, usually an apartment.
Rental Yield: 4.51% For a 120 sq. m. property, usually an apartment.
Rent/month: $2,082 For a 120 sq. m. property.
Income Tax: 3.03% Assumptions: Owners are a non-resident couple drawing US$ / €1,500 per month in rent, with no other local income.
Roundtrip Cost: 5.90% The total cost of buying and then reselling an apartment. Includes:

* all transaction taxes and charges:
* lawyers' and notaries' fees
* agents' fees

Assumptions: The buyers are non-resident foreigners. The apartment cost US$250,00 / €250,000.
Cap Gains Tax: n.a. Assumptions: The property was bought for US$250,000 / €250,000, and sold 10 years later, after a 100% appreciation.
Landlord and Tenant Law: Neutral Rating is based on a detailed study of each country’s law and practice.




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