Byblos Bank’s Real Estate Demand Index rose to 51.4 points in the third quarter of 2018, up from 43.7 points in the second quarter of 2018 and 49.6 points in the third quarter of 2017.
Nassib Ghobril, Chief Economist and Head of the Economic Research and Analysis Department at Byblos, said the improvement in the index does not reflect a major change in the current dynamics of the housing market. “The improvement comes from a low base following the first and second-quarter results, and is only based on the expectations of citizens,” he explained.
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To give the current reading some context, the index is 61% lower from the peak of 131 points registered in the second quarter of 2010. It is 14% lower than the monthly trend average score of 59.8 points since its inception in July 2007.
“The increase of the Index in the third quarter of the year followed the Lebanese Parliament’s vote in September to allocate LBP 100 billion, or USD 66 million, to subsidise interest rates on housing loans, given the suspension of subsidies since the beginning of the year. As a result, the new law raised the expectations of citizens that subsidized mortgages will resume, which triggered the jump of the Index in September,” said Ghobril.
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The answers of respondents to the Index’s survey questions in the third quarter of 2018 show that 5.8% of Lebanese residents had plans to either buy or build a residential property in the coming six months compared to 4.9% in the second quarter of the year and to 5.6% in the third quarter of 2017. In comparison, 6.7% of residents in Lebanon, on average, had plans to buy or build a residential unit in the country between July 2007 and September 2018, with this share peaking at nearly 15% in the second quarter of 2010.
“Lebanese citizens need to see the recently-enacted law translated into concrete measures that will lead to the resumption of mortgage subsidies, in order to convert this pent-up demand into actual transactions,” Ghobril said.
