The housing crisis is affecting citizens all over the globe, including the Lebanese. The crisis assumes several forms:
- Lack of accommodation amidst high demand and limited supply.
- Lack of houses for rental or expensive rentals.
- Unaffordable prices of the houses that are for sale.
In order to mitigate the third burden, governmental institutions were set up with the aim of providing housing loans. Banks devised loans for the same purpose and each such bank or institution laid forth its special conditions of borrowing.
In Lebanon, housing loans are provided by three main parties:
- Public Housing Institute: a governmental institution operating under the custody of the Ministry of Social Affairs. It provides, through Lebanese banks, housing loans not exceeding USD 120,000 at subsidized interest rates that it pays back to the lenders. After settling the loan, the borrower repays the Institute the interest payments it had settled on his behalf to banks.
- Banque de L’Habitat: a bank that is co-funded by a number of banks and grants housing loans at subsidized interest rates.
- The banks operating in Lebanon which provide housing loan programs at subsidized interest rates.
- In general, interest rates vary between 5% and 7% with a payback period that may stretch up to twenty years, depending on the age of the borrower, as loans must be repaid before the age of 64.
Volume of Housing Loans
These housing loans have facilitated the purchasing of apartments or the construction of houses and have helped find partial solutions for the housing crisis. Nevertheless, they remain somewhat scanty.
According to the graph below, the volume of these loans does not exceed USD 5 billion, despite the notable growth recorded between 2005 and 2015 when the value of loans increased by 730%. A striking increase of 35% was registered in a one year span, between 2011 and 2012.
INSERT ARTICLE 1
INSERT ARTICLE 2