Construction permits down
in number and surface
Mount Lebanon accounts for half of all new developments
The number of construction permits, which measures future construction activity, totaled 13,900 in 2015, dropping by 12 percent compared to the year before, according to the Orders of Engineers in Beirut and Tripoli. But the total area of these construction permits went down by only five percent and reached 12.3 million square meters. Around half of permits are located in Mount Lebanon.
The area per construction permit grew by around nine percent year on year, to 885 m2. In 2014 as well, the area per permit rose by five percent.
This trend suggests that the market is hosting larger developments and more established developers. Mohammad Sinno, Chairman of Vertica Realty Group, a property brokerage firm, said: “Professional developers are aware that if they want to succeed, they need to develop according to the economy of scale and this is why they are buying bigger land plots.”
Because the market is slow, it is becoming harder for small developers to carry on with their business. “Big developers are more financially solid and have more potential to take risk,” he said. The concept of gated communities is not new, but more clients are enjoying them. “Homebuyers are enjoying having common areas for their children, especially outside Beirut and in the suburbs,” Sinno said.
High construction activity is expected in Dbayeh, Hazmieh, Mar Takla, Baabda, Hadat, and Choueifat for next year, according to him.
The South and Nabatieh saw the most limited drop in terms of area and number of construction permits. “Investors know that they could get good deals on land for future commercial or private use in these areas,” he said. Prices of land are softening, except in some areas of Beirut, like Ras Beirut, where they are stable. “It is very difficult to find a good deal in this area because it is highly in demand,” he said. The Beirut Central District is again showing potential. “Solidere is doing a revision of prices, especially for service fees, which used to cost a lot in the past,” said Sinno.
Reported by Yassmine Alieh
Date Posted: Jan 18, 2016