Sunday, February 03, 2008

Real Estate, Rise up! Disaster on its way

In addition to the events that have been happening in Lebanon recently, the shootings, the riots, the electricity issue, the no president, etc... Average Lebanese couple also worry about their future. That is one problem (the future in Lebanon has the form of a problem) that many have faced, are now facing and will continue to face whereas the country's situation is not getting better.

One of the major set backs and obstacles couples, who are on the doors of marriage, confront is buying a house. Real estate has gone madly expensive in Lebanon that people are rushing faster and faster into finding a house and buying it before it gets even more expensive.

"Worldwide energy prices are being driven up as China's industrialization hits full speed." The steel demands of China, in the past two years, have grown very fast, making China become the net importer of steel, causing the raw materials to become rare thus expensive. Consequently, and on a local basis, new buildings are becoming more pricy. But this is not the whole story, even buildings that are more than 2 years old, which have not cost as much as building would do now, have also gone up in prices.

Therefore, a normal 3 bedroom apartment, ranging between 140 sqm and 170 sqm, in Beirut Suburbs for example, is now being sold for more than 100k*, while it was 75k* a couple of years ago.
In north metn (North Beirut suburbs and part of mountain Lebanon), the closer to the capital the more expensive evidently, the prices have risen up as well, by an average of 15 to 30k*.

The housing bank and the housing coop, give special loans up to 80k, that should be paid in 10 or 15 years, followed by the same number of years (total of 20 or 30 years), to pay up the interest which differs depending on the bank in question.

A small reminder, that the minimum wage in Lebanon is 200$* still. Dairy consumption: a small example, a medium milk box (powder) costs more than 7$, while it was a little bit more than 4$* a year ago. Fuel costs between 16 and 18$ for 20 liters (depending on the type).

The average household pays electricity, and also what we Lebanese refer to as "moteur", which is a private electricity provider, in addition there is the water, the phone bill, and the cellphone (god forbids we live without a cellphone in Lebanon), and the luxurious stuff, such as the TV cable, and Internet connection, and insurance for ourselves (few do, and only thanks to their workplaces), and the cars.
A movie theater ticket, is 6,7$.
A Burger King meal is 7$.
A drink is 8$.
A beer is 3$.
A normal restaurant, would cost you a 15$, you need a soda to wash it all down.
A 1kg of yellow cheese costs 7$, you can always buy the cheap kind anyway.
Vegetables, cereals, fruits, dairy, etc... now cost more!

I am stating these numbers in order for people abroad be able to make comparison with their own local prices. In order for them to see and imagine how father with a 350$ salary, can actually pay for a house rent (or not, if he's lucky to have owned it), house bills, kids school tuition, food, transportation, and not to forget, health hazards (municipality fees, taxes and such are not even mentioned here).

A couple, a lucky one, makes 1600$ together. Let's say, they both hold degrees, but nothing fancy. How could they buy a 100k house? How many years do they need to save up in order to pay the first payment, be it 10, 20 or 30% (depends on the bak)? Do they need to stop going out for 5 years? Stop living any sort of life? Just sit at home, make a cheese sandwich, and watch a movie on a local TV channel? And that is all to afford buying a house with a loan. What about the next steps? Such as the furniture? The wedding? Bills? Kids? How will they afford to raise children and send them to schools?

Life in Lebanon is getting ridiculously expensive, all prices are rising up, except for our salaries. Minimum wage remains 200$, and there is no talk about any increase at all, except for our taxes (Check Lebanon reform plan).

God Bless Lebanon, and our procrastination. I believe the above is a GOOD reason to demonstrate! or Not? Should we wait to starve to death?

* k = 1000 USD
* $ = USD

6 comments:

  1. That is why there is only two social classes remaining: the 20% rich and the 80% poor...and no middle class, but who cares? Joumblat, Berri, Hariri, Franjieh, Nasrallah, Aoun, Gemayel, Karamé, Geagea etc...they are all rich!

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  2. Quote ''A movie theater ticket, is 6,7$.
    A Burger King meal is 7$.
    A drink is 8$.
    A beer is 3$.
    A normal restaurant, would cost you a 15$, you need a soda to wash it all down.
    A 1kg of yellow cheese costs 7$, you can always buy the cheap kind''

    In Montreal

    A movie theater ticket, is 10$.
    A Burger King meal is 6.50$.
    A drink is 10$ with tip
    A beer is 5$
    A normal restaurant, would cost you 25$ (tax & tip incl)
    A 1kg of the cheepest yellow cheese costs 9$
    bus pass $66.25
    3 bedrooms condo $250,000
    3 bedrooms appartment $700 to $1500
    per month
    Minimum wage $8/hour x 120h/month= $960
    Median household income in Quebec= $58,600/year (stat Canada 2005) equivalent to $4883 gross, net after income tax $ 3418.
    Medicare is free, quality of public schools depend on the neighborhood, University tuition average $3000/year, government student loans & bursaries available to almost everybody.

    MOST IMPORTANT, NO ONE CARES WHAT YOU WEAR, WHAT YOU DRIVE, WHERE YOU
    LIVE, WHAT IS YOUR RELIGION & WHAT IS YOU POLITICAL AFFILIATION.

    For a Lebanese used to show up & gossips it is hard. You feel lonely as there is no sense of family and community here. There is nothing permanent, friendship, marriage, job, everything is temporary.
    Also, it is a consumption society: Consume as much as you can until you die. Furthermore, years goes by very fast as nothing happens in this country...

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  3. Definitely, I heard about some new statistics, there is a high percentage of people living in poverty and quite a bit living in EXTREME poverty.

    Thank you for the numbers kheireddine, really appareciated. Might almost be the same between canada and Lebanon, the difference is salaries are lower, and there is no medical programs and retirement plans (only recent private ones)...

    But what you're saying is canada is uneventful and boring? :P Then come back to Leb, we have insecurity, explosions and low salaries, that should keep you on your toes and year won't go by so fast anymore! (or maybe in a split second)

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  4. I have to read about the bad situation in Lebanon appreciate life in Canada ;)

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  5. wait till we have peace.. itll be soo expensive that we'll be looking for homes in the saudi sand dunes.. especially with the regional population growth rate..

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  6. My vision is clear... Lebanon will not be placed on my places to visit list:)) That is a sure thing.
    __________________________________
    Arizona Realtor

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