$480 million of new Beirut flats languish on market in 2014.
Summary: A total of 271 new apartments in Beirut valued at $480 million remained unsold in 2014, a recent study showed, in a sign of stagnation in the real estate sector.
BEIRUT: A total of 271 new apartments in Beirut valued at $480 million remained unsold in 2014, a recent study showed, in a sign of stagnation in the real estate sector. The study, conducted by real estate advisory firm RAMCO found that 83,976 square meters of residential area completed in 2014 has not been sold.
The study is based on 56 projects completed in 2014 and spread over 51 neighborhoods in the municipality of Beirut.
Raja Makarem, founder and managing director of RAMCO, said many of the units remained unsold due to problems either with the size, location, price or construction quality.
"Some developers have built apartments without a thorough understanding of the real estate market. Once completed, their apartments were not matched with existing demand," he added.
Real estate developers say that there is currently little appetite for luxury apartments with a price tag of more than $1 million as most buyers are instead choosing two- to three-bedroom apartments outside Beirut.
The study also showed that sales ratios have dropped by 2.5 percent compared to 2013.
It added that the average sales ratio (which is the ratio of residential area sold, out of the total residential stock under construction) thus stands at 76 percent in projects completed in 2014.
This ratio stood at 78 percent in 2013 and 82 percent in 2012. Nine projects from the list of selected buildings have a sales ratio that varies between 0 percent and 50 percent, of which one isolated project has sold no apartments at all.
"The unsold stock of apartments completed in 2014 proves that the residential market is still going through a period of stagnation," Makarem said.
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