Stagnation in Syria’s Real Estate Market

Refugees Looking to Buy Properties in Fear of Being Departed to Their Country

A general view shot shows a neighborhood in the Syrian capital Damascus. (AFP PHOTO / LOUAI BESHARA)
A general view shot shows a neighborhood in the Syrian capital Damascus. (AFP PHOTO / LOUAI BESHARA)

Stagnation in Syria’s Real Estate Market

The efforts of countries located in Syria’s vicinity and working to return Syrian refugees to their country forced the refugees to head to the real estate market, which is witnessing a major stagnation against the backdrop of the war in Syria.

The war erupted after popular protests in the country in mid-March of the year 2011. At that time, the regime of Syrian President Bashar al-Assad was toppled.

The war, in which international and regional parties participated, led to the displacement and asylum of millions inside and outside the country, after their areas were subjected to military operations that partially or completely destroyed their homes, depending on the intensity of the battles to which they were exposed.

Refugees Looking for Shelter in Their Country in Fear of Deportation

Three Syrian refugees residing in the Lebanese capital of Beirut said, "The Lebanese authorities have refrained from renewing our residencies, which has made us live in great concern, as we do not know when we will be deported to our country. So, we are trying to secure housing before our return."

The three Syrian refugees live in the Bourj Hammoud area on the outskirts of Beirut, where they have been working in construction and home decoration work since they left Syria in 2012, after the Syrian regions from which they come witnessed military operations between government forces and the opposition.

Buying Home Is Better Than Renting When There Is No Work

One of them told Majalla, “The cost of the monthly rent for a house that is sufficient for our family of four in the suburbs of the capital, Damascus, seems expensive in comparison to the lack of job opportunities. That is why I bought a house in installments after I was able to pay half of its price, while my brother who lives in Europe sends the monthly installments.”

This refugee aims to get rid of his monthly rent because he may not be able to pay it if he does not get a job in the event of his possible return to Syria.

He added, "The Lebanese government is constantly talking about returning refugees, and this means that our return may be at any time."

Housing Insurance Is One of Basic Requirements to Return

He continued, "The return has requirements, including home insurance, and therefore I bought a house in Syria in installments so that I could get rid of the rent upon my return."

This refugee is one of hundreds of Syrians residing in the Bourj Hammoud region, who are afraid of being sent back to their country amid “unfavorable conditions for their return,” as they put it.

Majalla spoke to other refugees looking for "modest" homes in order to buy them to avoid their return.

Another refugee from the Syrian province of Aleppo said, "The presence of a king's house makes us feel safe. Therefore, we must secure a house before our possible return, especially since my brother, who is residing in Syria, will take over the process of buying and registering the property."

Children playing in Barzeh neighborhood, Damascus – April 22, 2017. (Lens Young Deimashqi)

Real Estate Prices Vary Compared to Pre-war Period

This refugee is trying to get a house in the Sheikh Maqsoud area on the outskirts of Aleppo, stressing that real estate prices in popular areas have not increased much compared to the high-end neighborhoods of the city.

Sources told Majalla, "Real estate prices in Aleppo seem to be comparable at the present time to the prices that were before the war. For example, in 2010, an apartment could be bought for 20,000 US dollars in a popular area, but today it can be bought for USD15,000 and maybe less."

According to the sources, real estate prices in the high-end neighborhoods decreased more compared to the popular neighborhoods due to the exodus of the owners from the country or their desire to leave the country, which prompts them to sell their homes at lower prices.

A real estate dealer from Aleppo said, "The demand for real estate purchases is weak, but the purchasing movement is renewed from time to time according to the political and military conditions in the city."

He added that "what contributes to the demand for buying real estate is the attempts of countries to return the refugees, as they are trying to secure a foothold before deporting them to the country."

He continued, "Refugees contacted me from Lebanon and Turkey asking about affordable properties, and we have many offers, so any of them can find their request after a short search."

He stressed that "the movement of sales in slum areas seems faster, as they do not need government treatment in real estate departments."

He revealed that "three refugees, two of whom live in Lebanon and the other in Turkey, bought three properties through me last week."

Refugees Buy with Intention of Returning and Others Sell In Order to Emigrate

He added, "These refugees who bought homes are afraid to return to Syria, while the owners who were able to sell them through me were thinking of emigrating with the proceeds of their home sales."

He stressed that "the objectives of buying and selling differ from one person to another, as there are those who no longer have a stable income or work, but they own several properties. So they try to sell some of them to live off their sales price, while others try to sell what they own to leave the country, and there are those who buy for fear of returning to the camps upon deportation to Syria.”

The situation of other Syrian refugees residing in Turkey is not different from that of their peers in Lebanon. They also fear deportation to their country after the Turkish government reiterated its desire to return more than a million refugees to Syria by next year.

Syrian refugees prepare to return to Syria from the Lebanese border town of Arsal, Lebanon June 28, 2018. (REUTERS/Mohamed Azakir)

They Refuse to Return to Camps

Several Syrian families living in the Turkish state of Entebbe stressed that they plan to secure homes for themselves before returning them to Syria, where they will not be keen to live in temporary housing that the Syrian government says it will provide to everyone who has no shelter.

These families refuse to live in camps or temporary housing upon their deportation to Syria, where they wish to return to their original areas in the eastern countryside of Aleppo.

Syrian refugees gather in and near their vehicles getting ready to cross into Syria from the eastern Lebanese border town of Arsal, Lebanon. (AP PHOTO)

Real Estate Prices Rise with Depreciation of Lira Against Dollar

Despite the demand of Syrian refugee families in Turkey and Lebanon to buy real estate in their country, the requests for purchase are much lower than the offers for sale, according to what a researcher and an economic expert told Majalla from the Syrian capital of Damascus.

Economic researcher Hazem Awad said that "the movement of real estate markets has not yet been activated. The supply is large and the demand is little against the background of high prices. Therefore, whoever owns a property always adjusts its price according to the exchange rate of the Syrian pound, and thus real estate prices are constantly rising."

He added that "Syrians' financial solvency is weak, and the lack of liquidity in the market prompts people to refrain from freezing their money in real estate that may not be sold due to price inflation. Therefore, the real estate market is not witnessing any activity, especially with the new migration season that pushes people to offer their properties for sale."

He continued, "Groups on social networking sites indicate that supply is greater than demand, and there are those who got involved in the market after building real estate with the aim of investing but were shocked by the lack of customers, and only benefited from rents that, despite their high levels, remain low compared to the capital investment.

“There was a previous movement for sale, but the real estate market stagnated after the decision to compel real estate sales to pass a percentage of the property price through bank transfers, which complicated this issue.”

Real Estate Purchases Decrease Compared to Last Year

He stressed that "the issue of refugees from Turkey and Lebanon buying real estate has not yet affected the movement of the market, especially since large numbers of them are considering emigrating to Europe, provided that they pay the money they have to buy a property in Syria."

Awad also stressed that "the real estate market is affected by the decline of the Syrian pound against the US dollar, as real estate owners are trying to raise the price of their properties to offset the depreciation of the pound, and thus the percentage of real estate purchases in the current 2022 year has decreased compared to 2021."

Real Estate Loans Are Not Available to Everyone

The financial data of the Syrian Real Estate Bank revealed that during the first half of this year, it granted 15.9 billion Syrian pounds as housing loans, of which 9.6 billion Syrian pounds were restoration loans, while loans for the purchase of ready-made housing did not exceed 1.8 billion Syrian pounds, and loans for the purchase of an unfinished home were about one billion Syrian pounds.

Cladding loans exceeded 1.7 billion pounds, and cooperative society loans did not exceed 100 million pounds.

In 2021, the Real Estate Bank had granted 3808 housing loans whose total value exceeded 22.9 billion pounds, most of which were restoration loans at 44% of the number of loans granted, while the bank granted 409 home purchase loans worth 4.3 billion pounds. In the last month of last year, 490 loans were granted, worth 3.8 billion pounds.

Real Estate Bank Has Strict Conditions for Obtaining a Loan

Although thousands of Syrians received loans from the Real Estate Bank this year and last year, this matter does not solve the problem of most of them, especially since the expenditure has strict conditions for obtaining housing loans that most Syrians do not meet, according to another economic analyst who lives in the capital, Damascus.

The economic expert said that "the Real Estate Bank is studying the possibility of raising the loan ceiling from 50 million  to 100 million Syrian pounds, but the owner of this loan will fall into the problem of installments and bank interests.”

For example, how can an employee whose monthly salary is 100,000 Syrian pounds be able to pay 100 million loan installments?

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