The Hayek Group Newsletters and Reports

Property Investing in a Rapidly Changing World Economy

The global economy is facing a number of challenges, with many countries experiencing economic decline due to a variety of factors such as higher interest rates and the ongoing war in #Ukraine. In #Europe, many countries are already being affected by the war, and Latin America is struggling with inflation due to corruption and state mismanagement. #Russia is also dealing with the effects of war, while #China and other Far East countries are facing serious economic challenges. The #Middle East is no exception, with many countries facing similar economic difficulties.

Risks in volatile markets are higher than small and limited markets. The Lebanese small real estate market may seem risky to some investors due to the current economic and political situation in the country, the economy is also facing serious challenges, but investing in the country may not be as risky as it is in other large markets. One opportunity for investment in #Lebanon is the purchase of land, which can be a relatively safe and stable investment.

One of the main reasons for this is the fact that Lebanon's state assets are worth more than $150 billion. This does not include valuable resources such as oil and gas reserves, as well as a well-educated workforce, and powerful private sector, which has the potential to drive economic growth and revive the real estate market.

In the past3 years, the value of the Lebanese pound has fluctuated greatly, with 1 #USD roared from 1,515 LBP and now being equivalent to 48,000 LBP. This has led to many Lebanese becoming millionaires overnight but in their local currency, The #UN estimates that by March 2021, 78 percent of Lebanon's population was in poverty—triple the estimated number in 2020, and #GDP per capita dropped by 36.5% between 2019 and 2021.

Despite the high levels of public debt and the recent troubles in the banking sector, #Lebanon is far from #bankruptcy. The country has a long history of resilience and has shown the ability to recover from difficult situations. This, combined with the potential for wealth from oil and gas reserves, means that the economy is likely to recover and bring back the value of the real estate market.

In addition, the Lebanese real estate market has already begun to stabilize after the period of inflated prices that ended in 2018 and the sharp decline thereafter. This modest market balance is a positive sign for investors, as it indicates that the market is returning to a more affordable and sustainable levels.

Overall, while the Lebanese real estate market may have its challenges, it also has significant potential for growth and is less risky than other markets in the region. Investors who are willing to take a long-term view and have patience may see a good return on their investment by purchasing properties at the current discounted rates.

#economy #properties #challenges #investors

By Abdallah Hayek P.E
CEO of Hayek Group
Jan 16 2023

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