Lebanon empty flats raise fears of real estate collapse

BEIRUT: Ghostly apartment blocks and half-built buildings dot Lebanon, as entrepreneurs and experts fear that the country's key real estate sector is on the brink of collapse.

The small Mediterranean country's construction sector witnessed an unprecedented boom from 2008, fuelled in part by sales to wealthy Gulf Arabs and Lebanese expatriates. But after civil war broke out in neighbouring Syria in 2011, political insecurity caused these sales to dwindle and local demand to drop. A slump in oil prices from 2014 compounded this slowdown, leaving thousands of apartments unsold across Beirut, and forcing some developers to freeze construction sites.

"Some 3,600 unsold apartments exist today in Beirut alone," says Guillaume Boudisseau, an expert at the Ramco real estate consultancy firm. In front of Beirut´s port, a building dubbed "The Coast" is one of many luxurious apartment blocks desperately looking for buyers.

The tower was completed in 2014, boasting views over the Mediterranean and moored cargo ships from its 500-square-metre apartments. But in the four years since, just two of its 21 flats have been sold. "When we started works in 2010, the context was very different," said owner Hussein Abdallah, who had hoped to make lucrative sales.

Instead, the businessman had to hand over ownership of eight flats in the building to the bank to pay off his debt. Other entrepreneurs have decided to halt building altogether. A road back from the Beirut seafront, the construction of another tower grinded to a halt two years ago, with only the concrete outer shell completed.

"We only sold a single apartment off plan," its owner said, asking to remain anonymous. He reduced the price by 20 percent, "but it didn't help", he added. Near the capital's iconic Martyrs' Square, the foundations of another high-brow project -- "Beb Beirut" -- stand frozen in time, concrete pillars jutting out from the ground, and rusty rebar rods protruding from them. Still cranes loom overhead, while all around the stunted construction site sparkling new apartment blocks appear completely empty.

Owner Mireille Choufany decided to stop building two years ago. "Demand is almost non-existent," she said. Outside the capital, real estate sales have also dwindled. Sales dropped by 19 percent during the first ten months of the year in southern Lebanon, and by the same percentage in the north, according to the country's real estate registry.