Beirut real estate: Really expensive
TEXT OF STORY
Scott Jagow: In Beirut, the fighting has stopped for the moment. There’s a new power-sharing agreement between Hezbollah militants and the new Lebanese government. You’d think real estate in a war-torn city like that would be dirt cheap. But actually, homes and condos are pretty darn expensive, and foreign investors are starting to notice. Ben Gilbert reports from Beirut.
Ben Gilbert: Just two weeks ago, Hezbollah militiamen fought street-to-street in this west Beirut neighborhood, using machine guns and rocket propelled grenades. After the smoke cleared, the windows were blown out of high rises on some streets, but the offices of Coldwell Banker stood unscathed and business quickly resumed.
Combat is normally not a good sign for real estate. But broker Mario Mohanna says Lebanese investors see this as a buying opportunity.
Mario Mohanna: There is a French proverb that says you have to buy on the sound of the cannons, and sell on the sound of the violins. And here, they are applying this hundred percent! More things goes worse, they say this is an opportunity to buy!
Mohanna volunteered to take me to an old Lebanese house near his office that’s he’s renovating for a client. It cost around $2 million one year ago. It will be worth $6 million after renovation.
Gilbert: Like 10 days ago, there was fighting about three blocks from here, and the price hasn’t gone down at all.
Mohanna: Not at all, it didn’t go down.
Without skipping a beat, Mohanna resumes his tour:
Mohanna: You see this is from here the facade, the main facade, which is wonderful. This will become a garden.
Mohanna is unshakably optimistic, but it seems for good reason. Real estate prices have risen by at least 30 percent here in the last few years. Some areas have seen prices double.
Mohanna isn’t really worried about renewed fighting, but he does have limits.
Mohanna: Don’t buy without parking. No parking you will never be able to sell it again. This is a must now.
Mohanna has done his homework. Throughout Lebanon’s civil war, property prices rarely went down.
Ashraf Kojok, the manager at Coldwell Banker’s west Beirut office, says rich Gulf Arabs love Lebanon, as do the millions of Lebanese overseas who earn salaries in strong euros and buy Lebanese real estate in cheap dollars.
In Beirut, I’m Ben Gilbert for Marketplace.
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