BEIRUT, Sept. 11 (Xinhua) -- New construction permits in the first seven months of 2018 dropped by 13 percent compared to the same period last year, according to Lebanon This Week, Byblos Bank's weekly economic bulletin.
Raja Makarem, chairman and founder of Ramco Real Estate Advisors, attributed the drop to the increase of land prices in Beirut.
"This does not encourage developers to buy lands and start with new projects," he told Xinhua, saying that the complicated political situation is one reason behind the stagnant real estate market.
"This is why developers are not getting involved in new projects and only those who have started construction four or five years ago are still continuing their projects," he said.
Makarem noted that there is currently a big supply in residential projects while demand is slow.
Unsold apartments in Beirut and other areas of the country have become a common sight, prompting some developers to lower their prices in a bid to cut their losses.
"Some people are buying apartments nowadays to take advantage of the discounts offered by developers due to the stagnant real estate market," he said while adding that demand is still low.
Makarem believes that the market will become active again when the war in Syria ends.
"Foreign companies will come to Lebanon to take part in rebuilding Syria. They will be in need for new apartments and offices," he said.
The Central Bank provided commercial banks with a fund worth 500 million U.S. dollars in February, to subsidize housing loans that would be used by Lebanese citizens to buy apartments.
The fund, however, was drained within a month.
The banks are now offering housing loans with an interest rate of around six to seven percent on loans in U.S. dollar compared to three percent for subsidized loans.