BEIRUT, Aug. 16 (Xinhua) -- Byblos Bank Real Estate Demand Index for the second quarter of 2018 increased by 31.8 percent compared to the first quarter of 2018, according to a statement issued by the bank Thursday.
Nassib Ghobril, chief economist and head of the Economic Research and Analysis Department at the Byblos Bank Group, attributed the increase to the announcement in April by the ministries of Finance and Social Affairs that the government intends to allocate 1,000 billion Lebanese pounds (0.66 billion U.S. dollars) to subsidize interest rates on housing loans.
The Byblos Bank Real Estate Demand Index is a measure of local demand for residential units and houses in Lebanon.
Lebanon's Public Corporation for Housing announced on July 8 that no applications for housing loans will be accepted from July 9.
The Central Bank of Lebanon usually funds the housing loans. It provided commercial banks with a fund worth 500 million U.S. dollars in February, allocated for subsidized housing loans that would be used by Lebanese citizens to buy apartments.
The fund, however, was drained within a month.
The commercial banks therefore are offering housing loans with an interest rate of around six to seven percent compared to three percent for subsidized loans, making people hesitate to purchase at such high interest rates.
Ghobril pointed out that ''the ongoing suspension of the subsidy program will continue to weigh on the willingness of prospective buyers to acquire a residential unit, given that buying a house constitutes one of the most important investment decisions for the Lebanese."
He noted that ''it remains the responsibility of the executive branch to not only cover interest subsidies on housing loans for limited-income citizens, but also to take the lead in developing a comprehensive housing policy that stimulates demand for all segments of the residential housing market in Lebanon.''