Flagship Lebanese property developer Solidere has delivered a strong performance, reflecting the boom in the property market despite multiple crises in the country.
Solidere’s share jumped 220 percent from $5 at the end of 2019 to $16 on the Beirut Stock Exchange (BSE) on Tuesday.
According to Solidere’s consolidated financial results, revenues from land sales rose 51.4 percent to $228.7 million in the first half of 2020 from $151 million in the same period in 2019.
The figures come as the real estate sector’s shares controlled 52.47 percent of BSE’s total trading volume, which soared 52.98 percent to 1,428,230 shares in November, up from 933,600 shares in October.
In November, property sales continued to rise with the value of total real estate transactions jumping 113.8 percent to $12.27 billion by November, compared to $5.74 billion in the same period last year, according to the General Directorate of Land Registry and Cadastre (LRC).
Annually, the number of real estate transactions rose by an annual 55.81 percent to 68,881 transactions by November.
On a monthly basis, the number of deals rose 83 percent to 6,038 in November, up from 3,300 recorded in November while foreigners made 120 transactions in November, up from 64 in November 2019.
So why is Lebanon’s real estate sector booming during the crisis?
Investors now see Lebanon’s real estate sector as the safest investment as depositors try to release their deposit from banks. However, following the devaluation of the Lebanese pound, the stock of residential units remains significantly higher than the actual demand, as most Lebanese citizens and especially young people find it difficult to buy an apartment, with no loan facilities and no government plan to support them.
The number of real estate transactions in Lebanon rose by an annual 55.81 percent to 68,881 transactions by November
Sami Breidy, a real estate agent, explained to Arabian Business that Solidere’s share price rise is due to the “uncertainty” surrounding investment in alternatives in general, sharp fluctuations in the exchange market and a lack of clarity in anticipated government financial and monetary policy, as well as the intractable governmental crisis and the intensity of the conflict in the region and in Lebanon.
He added: “The increase in property prices is due to the stalemate in the construction movement and its impact on the size of supply. The implementation of many projects has been halted due to the noticeable rise in the price of building materials, especially with the scarcity of dollars needed to import them.”
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