Demand for residential real estate in Lebanon improved in the third quarter of 2018, as reflected by the results of the Byblos Bank Real Estate Demand Index. The Index posted a monthly average of 51.4 points in the third quarter of 2018, constituting an increase of 17.4% from 43.7 points in the second quarter of 2018 and a growth of 3.7% from 49.6 points in the third quarter of 2017. The Index decreased by 19.3% in July and by 14.2% in August, but increased by 26.3% in September.

Demand for housing in Lebanon improved in the third quarter of the year following the Lebanese Parliament's vote in September to allocate LBP100bn, or $66m, to subsidize interest rates on housing loans, given the suspension of subsidies since the beginning of the year. As a result, the new law raised the expectations of citizens that subsidized mortgages will resume, which triggered the jump of the Index in September.

However, the increase of the Index in the third quarter does not reflect a change in the current dynamics of the housing market, as the improvement comes from a low base following the first and second-quarter results, and is only based on the expectations of citizens. Further, the Index's average monthly score in the third quarter of 2018 is 61% lower from the peak of 131 points registered in the second quarter of 2010, and remained 53.2% below the annual peak of 109.8 points posted in 2010. Also, it was 14% lower than the Index's monthly trend average score of 59.8 points since the Index's inception in July 2007.