View from Sama Beirut (not yet finished) via Skyscrapercity.com
Why am I not surprised to read the below numbers? I always wondered whether these new projects in Achrafieh and Beirut are getting sold specially that they are selling at unbelievably high prices.
Some 72 percent of residential projects in Beirut completed over the course of 2012 with a market value just shy of $400 million are still unsold, according to a study released Tuesday by real estate adviser RAMCO. In the study RAMCO said that 217 apartments – representing a total of 71,361 square meters – completed in 2012 remain on the market [DailyStar].
Think about it for a second: If you are buying a 150 square meter flat, with a price of at least $2,800 per square meter, this means it will cost you $420,000, add to that registration cost and furniture and all, you will end up paying half a million dollars.
I don’t think any bank will give you a loan amount of $400,000 unless you earn more than $10,000 a month. This being said, why are some real estate companies still coming up with new projects? Who is their target customer? How many Lebanese have this kind of money in cash? Why aren’t they lowering their prices if they want to sell? Are they waiting for Arab tourists to come back?
According to RAMCO, 18 – or 28 percent – out of 65 residential projects with an asking sale price of at least $2,800 per square meter are completely sold out.
If the Finance Ministry is that concerned about selling these new projects, let them propose a better way of pricing real estate projects inside and outside Beirut. I am not asking them to regulate the prices but to cut down the companies’ profits and propose a rational way of pricing flats. When an apartment in Adonis for example facing the Zouk Power Plant and with barely any view is priced at $1600 the square meter, something’s not right.
The low demand for properties is also affecting the revenues of the Finance Ministry which relies heavily on the taxes from any real estate transaction.
I have a feeling these projects are built with ‘washed” money. So no damage done. One day the gulfies would return and payback will be there!
I tend to agree with Gianni