With Lebanon settling down to a period of peace and stability at long last, its beautiful capital, Beirut, once again offers a real estate investment opportunity for foreign buyers.
A bustling city set between the Lebanon Mountains and the Mediterranean Sea, Beirut has many neighbourhoods with stunning views. Once dubbed the Paris of the Middle East, civil war, conflict with its neighbours and political instability have meant foreign property buyers have often overlooked Beirut.
A densely populated city of 1.5 million people, Beirut has very little land to spare for more development. So any properties that come on the market are snapped up quickly.
"Beirut is a very fluid part of the country in terms of real estate," says Ellie Harb, president of the Beirut branch of market analysts and brokers Coldwell Banker.
"Prices range from around $1,000 (Dh3,670) to $10,000 per square metre and overall everything is selling in Beirut."
Lebanon's economy has seen stability in the current climate and this is reflected in the end-of-year sales figures in its property market, which analysts say is buoyant. While cities around the world, especially in North America, face the fallout of the sub-prime crisis, Beirut has seen a year-on-year growth in its property sector.
Property sales in 2007 reached $4.219 billion compared to $3.151bn in 2006 and although figures for 2008 have not been released yet, Harb says there has been an eight per cent increase over 2007's figures.
"Since 2000 [when Israel pulled its troops out of Lebanon], Beirut traditionally represents 10 per cent of the total property sales in the country, 35 per cent by value. When you say Beirut, it is a cosmopolitan city with many neighbourhoods, some very high-end," said Harb.
"In 2008, there were 10,000 property transactions – 35,000 if you include land transactions."
Following the 2006 conflict with Israel, the Lebanese government issued legislation to boost the real estate sector through cutting back on registration fees for non-Lebanese. Financial assistance has also been made available to real estate promoters.
Despite this growth, Harb says foreign buyers account for only two per cent of the market, as the country's political instability is often a deterrent.
"I could sell you a property for $10 million and you could see a 100 per cent return," he says. "But if there is a war or conflict then you may see a 100 per cent depreciation."
Lebanon is weathering the on-going economic storm a lot better than other Mediterranean countries. Its central bank has put a ban on lenders buying sub-prime debt packages and put limits on loan levels for real estate projects. According to its governor, Riad Salameh, banks have to have at least 30 per cent of their assets in cash.
Real estate firms in the city believe returns for foreign investors are good and visas are uncomplicated for those who want to relocate to Lebanon.
Antoine Abou Rizk, manager of Real Estate Lebanon, says Beirut has always been a good place to buy and does not follow market conditions.
"It has its own engine and its own mind," he says. "Prices have risen since the global financial crisis started. Even the few new residential projects are selling very well and at higher than current market rates.
"I don't know whether that is because the crisis hasn't reached us yet, but we have not been affected by the sub-prime crisis."
Rizk believes that because of the lack of areas to build in Beirut, the market will always be strong on the back of ever increasing demand.
"Lebanon is not like the UAE, where if you want to build new projects you can go into the desert," he says. "In Beirut we only have a specific area and we are limited to that.
"I guess now would be a good time to buy in Beirut as there are returns of 15 per cent to 20 per cent. And for foreigners wanting to live here, it is relatively easy to get a visa."
Property in high-end areas such as Ashrafieh, Ramlet el Baida and Tallet el Khayat is hard to come by, which also pushes prices up.
"A Mediterranean Sea view is something that is sought after by many buyers, as is an area with good amenities," Harb says.
"However, there are very few foreign buyers in Lebanon and buying real estate in Beirut is done out of need on the one hand and having something that nobody else has on the other."
Some projects earmarked for the Downtown area of the city have not been completed, which also puts off foreigners. These include Damac's La Residence tower in conjunction with Ivana Trump that was launched before the 2006 war.
On the market
Le Patio, Beirut – from $1.2m
(Three-bedroom apartments, from 300sq m)
Le Patio in Ashrafieh is a three-tower residential development with floorspace ranging from 300sq m to 500sq m, and a starting price of $4,000 (Dh14,680) per sq m.
This development by Jamil Saab and Company includes 700sq m of green space. The building is between Rue Huvelin and Rue du Liban, along the future boulevard down to Saifi Village, and overlooks a private inner garden.
The apartments are either three to four-bedroom, with five-bedroom penthouses available.
The balconies and glass doors offer stunning views of the mountains and Mediterranean Sea. Apartments come with an indoor-outdoor terrace.
This development forms part of Jamil Saab's current projects, which include Sursock Tower, an 18-storey building also in the Ashrafieh area..
The Edge, Beirut – from $693,000
(Three-bedroom apartments, from 330sq m)
The Edge in Hazmieh Brazilia is five minutes from downtown Beirut. It has 330sq m of floorspace and prices start at $2,100 (Dh7,700) per sq m.
This project, of three- and four-bedroom properties, will have fixtures and fittings of the highest quality. Facilities at The Edge include three car parking spaces and a solar-energy system to heat water.
Antoine Abou Rizk, manager of Real Estate Lebanon, which is selling apartments at The Edge, said the real estate market in Lebanon remained solid, which was reflected in the level of construction in this well-heeled area of the capital.
"Demand is still high from Lebanese and expatriates but the market is also primed for foreign buyers and investors," he said.