There’s something really wrong with the real estate system in Lebanon.

If you wanna buy a house through a bank loan, then by law your monthly installment can’t be over 1/3 of your base salary.

We are all aware that salaries in Lebanon are not that high with the majority of employees earning between $500 and $2,000. So, most Lebanese who have grown up in or around Beirut and who want to purchase an apartment in their areas, can’t really afford it.

Example: if you make $1,500 / month then you could only buy something with an installment of $500/month. So if your bank loan is for 20 years, this means you would have paid by the end $120,000, including interest. This means that with the rates offered by today’s banks your initial loan amount would be approximately 60 to 70K, depending on which institution grants you the loan.

What can you get for 70K you ask? Well, nothing, or nothing livable in I guess, unless you have enough cash to fork over for a sizable down payment.

So an alternative would be to rent an apartment, but according to this recent article (it’s in French btw), Beirut is the # 10 most expensive city in terms of rent for expatriates. If you check out real estate websites, you’d find that renting a decent apartment in or around Beirut would cost you $750+ (expatriate or non-expatriate). This is not a problem if the renters are single people who can share an accommodation. It is an issue for people with kids.

The rent / buy process is not very well thought out to be honest:
Buying a house is related to your salary but renting one isn’t… So the same person who makes $1,500, by law, can only pay $500/month but is allowed to pay astronomical sums to rent a place

I was watching “Kalem El Ness” with Marcel Ghanem last Thursday. The show was dedicated to the real estate boom in Lebanon. They had invited normal citizens on the show to share their stories. One of the women was saying that with her salary, she can’t really afford to buy a house according to the 1/3 rule, but then again she pays 60% of it in rent. The only piece of advice that the people on the show (ministers, real estate agency heads etc..) gave her was: “Alla yise3dik” (God help you).

Great advice… I’m sure it’ll come in handy when the money runs out…