Lebanon ranks 81st globally, 10th among Arab countries in transparency of real estate sector

Economic Research | Lebanon This Week | Lebanon This Week 542 | Lebanon ranks 81st globally, 10th among Arab countries in transparency of real estate sector | Lebanon | Byblos Bank

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Lebanon This Week 542

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Lebanon ranks 81st globally, 10th among Arab countries in transparency of real estate sector

Jones Lang LaSalle's Global Real Estate Transparency Index for 2018 ranked Lebanon in 81st place among 100 countries and markets worldwide and in 10th place among 15 Arab countries and markets included in the survey. Lebanon also came in 23rd place among 29 upper-middle income economies (UMICs). Based on the same set of countries and markets included in the 2016 and 2018 surveys, Lebanon's rank changed from 83rd place in 2016 to 81st place in 2018.

The index, which is issued every two years, measures national real estate transparency across the globe and is used to compare transparency conditions across markets. It highlights the important differences in transactions processes, property rights and the regulatory and legal environment around the world. It also aims to provide international benchmarks to cross-border investors, developers and occupiers of real estate, as well as government and industry bodies, in order to measure and improve transparency in their markets.

Jones Lang LaSalle compiled the index from 186 quantitative and qualitative transparency measures that are grouped into 14 major topic areas, which are, in turn, grouped into six sub-indices. The six sub-indices are Performance Measurement that has a weight of 28.5%, Market Fundamentals (16.5%), Governance of Listed Investment Vehicles (10%), Regulatory & Legal Issues (25%), the Transaction Process (15%) and Sustainability (5%). The index scores range from 1.00 to 5.00 points. A country or market with a perfect 1.00 score is considered to have a high level of transparency, while a score of 5.00 represents the lowest transparency level. The survey then assigns countries and markets to one of five transparency levels that are "Highly Transparent", "Transparent", "Semi-Transparent", "Low Transparency" and "Opaque". 

Globally, Lebanon's real estate market is more transparent than markets in Oman, Tunisia and Uganda, and is less transparent than markets in Rwanda, Ecuador and Panama. It also ranks ahead of only Algeria, Belarus, the Dominican Republic, Iraq, Libya and Venezuela among upper-middle income economies. Lebanon received a score of 4.18 points in the 2018 survey compared to 4.06 points in the 2016 study, 3.9 points in the 2014 survey and 3.75 points in the 2012 study, reflecting a deterioration in the transparency level of the Lebanese real estate market. Also, its score lagged the global average of 3.2 points, the UMICs' average of 3.5 points and the Arab average of 3.8 points.

Further, the Lebanese real estate market came in the "Opaque" category in the 2018 survey, along with 20 other countries in the world that include Angola, Ethiopia, the Dominican Republic and Senegal. The survey downgraded the Lebanese real estate market from the "Semi-Transparent" category in 2012 to the "Low-Transparency" category in 2014 and to the "Opaque" category in 2016.
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