Archive | Economy

The Housing Bank Just Screwed Home Shoppers in Lebanon

The two most popular options for home shoppers in Lebanon in order to finance their purchases is to either get a loan from the General Organization for Housing in case the apartment price is relatively low, or from the Housing Bank if the price is on the higher end.

However, earlier this month the Central Bank of Lebanon issued a new circular with amendments on subsidized loans, and as a result the Housing Bank increased its the interest rate from 3% to 3.75% while lowering the payment period from 30 to 20 years and toughening the lending terms in general.

To give you an idea of how these amendments impacted the monthly payments, a loan of $250,000 used to cost ~$1,050 on the previous conditions, but currently cost ~$1,500 based on the new terms and rate (refer to their loan calculator). Needless to say, this 50% increase means that a lot of home shoppers now can no longer afford the apartments they were previously aiming for!

I, for example, have been searching for an apartment in Beirut for a while now and the new terms mean that I have two options, to either settle for a significantly smaller one in space, or simply look for one of the same size outside the city. The latter is unfortunately a deal breaker for me so I just decided to halt everything now in hope for the prices to go down maybe… I guess it is only logical for this to happen now that the demand is expected to take a hit.

Things are by the way also quite ugly now for people who are already engaged by contracts with real estate developers. Those usually pay monthly installments directly to the developers until the project is fully complete, and then apply for a loan to finance the remaining amount, but they definitely didn’t see a 50% increase on their future payments coming! And while people like me can simply stop searching, others who are bound with contracts can do nothing but go for the loan anyway or pull out of the whole thing and pay a certain penalty to the developer for doing so.

I’m not an expert in economics but things seriously don’t seem right with the new Housing Bank decision, I mean you can’t simply cut down the people’s purchasing power just like that. I just hope this isn’t an indication of the Lebanese Lira being in a bad situation now and I also hope these amendments are only a temporary measure. Otherwise, I guess the real estate market is expected to go into stagnation no matter how developers try to convince the public that it is a resilient sector!

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Here’s How Much You Should Now Pay When Leaving Beirut Airport

The minute President Aoun pased the salary scale and tax hike laws 2 days ago, the civil aviation authority at Beirut Airport instructed all operating airlines to start collecting an exit tax as of Wednesday (August 22nd). But unfortunately people remained clueless about the exact fees and exceptions since no details were provided by the government except for the article published in the official journal which (almost) no one reads…!

As per article 9 of law #45, here are the fees to be paid:

  • For economy class 60,000L.L ($40)
  • For business class 110,000L.L ($78)
  • For first class 150,000L.L ($100)
  • For travelers aboard private jets 400,000L.L ($266)

Note that passengers aboard flights with distance less than 1,250Km are exempted from this tax, so you’re clear if you fly to Cyprus, Greece, Turkey, Jordan, and other nearby destinations.

I assume those who have already purchased their tickets before Wednesday are paying the exit tax in cash at the airport, but I’m not sure whether it is going to remain like that in the future or airlines will simply add to their tickets prices…

A lot of posts/messages are circulating about the new taxes by the way but most have incorrect figures, so make sure to refer back to the this issue of the official journal for the exact figures and consult your lawyer for additional info.

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