Waiting for Godot:
It is somewhat understandable, albeit unethical, that a real estate developer, or a seller in general, would lie about the true state of the sector, by exploiting the lack of transparency, in the hopes of maximizing the price he receives for his property, at the expense of a naive, uninformed buyer. Real estate developers and other, so-called "experts" in the field, are totally convinced that the current crisis is a confidence issue. That is, if only we can elect a president … if only a government would form … if only summer comes (and the Gulf nationals and expats would come running in) …. if only the government would resolve its offshore oil drilling … and other such nonsensical hopes ... then everything would be fine.
They are basically convinced that the current crisis is a confidence problem. In other words, there are all these rich Lebanese expats sitting on boatloads of cash, waiting for “stability” at which point they will start spending their excess cash, paying their ridiculously expensive and way overpriced asking prices. However, they are failing miserably in understanding the crux of the real estate sector’s problems.
It is NOT a confidence problem. It is a lack of CASH problem. Basically, cash in the country by expats and others has dropped precipitously, because of lower oil prices, lower economic activity in the Gulf, and, last, but not least, the government deficit and high interest rates that are sucking out any excess cash to fund the government.
What they also don’t realize is that all those recent sales using 100% loans from Iskan (which they’re so happy about), once the major drops start, will go right back into the market as distressed sales or auction sales to re-compete with their unsold properties.
In other words, there will be no relief, not this summer, not this year, not next year, and not the year after, and developers now are starting to run out of oxygen and they will start to have to regurgitate price drops forcefully and silently in the coming months and years.
The only question remaining is why would any broker, whose only interest is to increase his frequency of sales, support the lie that prices haven’t dropped? Doesn’t he realize that his credibility is on the line? Doesn’t he realize that the only brokers who will survive this crash are the truthful ones that people trust?
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