The threat of a political spill over from the ongoing unrest in Syria could decelerate the already slowing growth of the real estate sectors in Syria, Lebanon and Jordan, warns market strategy research firm Roubini Global Economics. The uncertain political outlook in Syria will lead investors to view the wider region cautiously, and cooling credit growth will put more pressure on the region’s real estate sector. This could hurt the gains that were made in the sector in the years following the 2008 global financial crisis, when property prices began to increase.

The housing market in Syria has seen prices decline by more than 50% in 2011, when compared to 2010, while the number and value of property sales in Lebanon had declined by 16.6% and 13.4%, respectively, in 2011, when compared to 2010.


“Real estate investors have little choice but to look [to] markets outside [of Syria],” said Abdallah Hayek, CEO of Hayek Group. “While low prices might seem like an investment opportunity, the unrest and unpredictability of the situation in the country make this an unappealing option for an investor looking for assurances, stability, and [certainty over the] government he is dealing with [and the] regulations [that] will govern real estate.”

Lebanon’s real estate sector was also found to have been stymied. Roubini Global Economics found that although average property sales in the country increased by 4% between January 2011 and September 2011, when adjusted for inflation, property prices actually decreased by about 2.7% during the same period. This contrasted with the rises in house prices that the Lebanese property market experienced in the three years up until 2011.

Yet, despite the seemingly volatile regional outlook, Jordan’s real estate sector has proven itself resilient. Jordan witnessed an increase in the number of foreign investors entering the housing sector in 2011. The value of the Arab and foreign real estate purchases in the country increased by 33% in 2011, when compared to 2010, and Roubini Global Economics estimated that the total value of investments stood at $630m. This points to an emerging trend whereby capital exits Syria, and short-and mid-term property investors look primarily to Jordan as a safe haven.

Jordan witnessed revenues from real estate trading increase by 49% in the first two months of 2012, reaching $28m, compared to $18m during the same period in 2011. Official estimates released by the Jordanian government maintained that trading in the housing market saw a 24% increase during the third quarter of 2011, making the real estate sector one of Jordan's top-performing sectors in 2011. The Jordanian Department of Land and Survey said that the property market increased from $5.5bn in 2010 to $6.9bn during the first nine months of 2011.