Mireille Korab Abi Nasr, Head of Business Development at FFA Real Estate, comments on the increase in demand towards smaller, more affordable homes.
Every decade or so, Lebanon’s real estate market witnesses a shift in demand; investors and realtors unhurriedly adapt to changes, making for a somewhat stable market. Or at least, that was the case. Today, investors’ buying moods and needs change practically every couple of years, bringing about confusion and perplexity to a “habituated” real estate market.
The increase in prices along with a diminishing purchasing power has resulted in people settling for much smaller apartments in order to live within the capital, or choosing to relocate to the suburbs to afford more spacious homes.
The new generation is also having an impact on housing in Lebanon, as more and more young people are opting to move into their own places, usually after completing their college studies. The result of this change in housing requirements and the target market’s new approach towards a more practical lifestyle, means smaller one bedroom apartments or studios are now very much in demand. This, in theory, should allow them to live in the heart of the city and enjoy the vibrant lifestyle while being in close proximity to their work and home addresses.
The rapid change in consumer’s wants and needs has predominantly affected the ‘older generation of developers’, whom were used to building bigger units – of an average to 250 square meters in the city’s capital, Beirut. As a result, the mounting demand for smaller apartments – ranging from 50 square meters studios to 120 square meters two bedroom apartments – has dramatically influenced the way in which these developers do business.
Also, in recent years, house prices have risen dramatically, essentially due to the law of scarcity that governs the expense of plots of land. In this way, the prices of plots either increase or remain stable – they do not decrease, however. This is especially true in Beirut where there are very few plots of land available to build upon, and even these are becoming lesser and lesser.
In my opinion, the key to buying a plot of land and planning a development at this point is carrying out sufficient market research beforehand – a practice that wasn’t always so common among local developers. In order to keep up with the ever-changing industry, we too must change and adapt accordingly.