By John Noja*
Country Development Manager
OLX Lebanon
In the midst of an unpredictable real estate market, many solutions have been introduced to ease people’s worry, one of which is “rent-to-own” contracts. These contracts, not only are they crucial for positive change, but can help boost the sector by making deals more efficient, stabilizing prices, as well as ensuring healthy competition.
Among the factors contributing to this scepticism, is the depletion of funds provided by commercial banks at subsidized rates. These funds were aimed at subsidizing housing loans for families, as well as youth, with limited income. The amount BDL provided is estimated to be around $500 million just for 2018, which was exhausted in one month due to unprecedented demand.
According to a July 2018 EcoNews report by Société Générale de Banque au Liban, Banque du Liban and local banks hold the majority of Eurobonds, and construction activity is still holding up, which is indicated by cement deliveries being unchanged in the first four months of 2018 compared to the same period in 2017. This is another testament that many sectors in Lebanon’s market are performing well, which can help elevate the economy of the country, namely property and real estate.
OLX Property has a solid reputation and international experience. Also, it is a contributor and facilitator to Lebanon’s real estate sector, all the while taking current market dynamics into account. Some of OLX key property clients (real estate developers and brokers) are starting to offer the adoption of “rent-to-own” contracts, as an alternative to the traditional real estate selling contracts.
A “rent-to-own” contract entails renting a home for a specific amount of time before the renter can exercise the option of selling the property when, or prior to, the lease expiring. Through this method, a written agreement is a guarantee that the seller has given the tenant the right to buy the house at any time during the agreement in the future for a price that is agreed upon based on market’s prices. In this agreement, a property is typically rented out for a set amount of time (usually one to three months) after which it could be purchased from the seller. Terms and conditions must be met in accordance with the contract.
President of the Syndicate of Public notary in Lebanon, Mr. Joseph Bechara, has explained that in theory, the “rent-to-own” or “leasing” concept exists in Lebanon but has not been applied yet in the local real estate market. Even though “rent-to-own” contracts have been introduced, Lebanese citizens require some time to learn about it, since it is not the primary method of buying homes. Additionally, property owners avoid receiving payments via installments and prefer to settle payments by cash.
There is room for rent-to-own as the market is sustaining its active level with the high number of visits and properties listed for sale and rent, OLX Lebanon’s online website is a reflection of what is happening in the market and its conditions. Visits to our property section increased by 9.3% in June 2018 compared to June 2017, while the average time spent by users browsing properties for rent and sale recorded a rise of 18%.
It is important to note that market prospects are still positive. In a June report compiled by Moody’s Investors Service, other sectors in Lebanon have been holding up well at the start of 2018. The overall economy is predicted to expand by 2.5% in 2018 and continue to improve into 2019, based on revised economic policy coordination, and the implementation of the commitments made during the CEDRE conference.
Moreover, OLX gives its property sellers exposure to a very wide population of expats visiting the platform on a regular basis. Each year, OLX Property receives 1.1 million foreign visits which represent approximately 10% of total visits, with the most represented countries being Saudi Arabia, the United Arab Emirates, the United States and Germany. Foreign visitors on the OLX’s property section are mostly interested in apartments for sale, and look at prices that are approximately 23% higher than the average other users look for.
GH Development Real Estate, one of OLX Property’s key clients, has noted that customers are facing difficulties in purchasing a house, especially with housing loans offered by Iskan being stopped. GH Development offers the solution of allowing a customer to move into an apartment and lease it over a certain period of time until the customer is able to acquire a housing loan, and only require a small down payment along with the monthly rent.
Ray White Lebanon, another OLX Property’s leading client, applauded OLX’s highly professional team that always enables the cooperation between the platform and he real estate brokerage companies in order to overcome the market’s uprising challenges. And Yazbek Real Estate are also some of OLX Property’s prominent clients, who agree that the platform has contributed to new business prospects, especially in the category of “rent-to-own” contracts and solutions, which help optimize results that avoid risks in a volatile market.
About OLX Group
The OLX Group is a global product and tech company which operates a network of market-leading trading platforms in over 40 countries.
With more than 330 million monthly users worldwide, OLX Group makes it fast and easy to buy and sell almost anything online, such as household goods, phones, cars and houses. Through consumer brands including Avito, dubizzle, letgo, OLX, and many dozen others, more than 15 million things are exchanged on its apps and platforms every single month.
The OLX Group is powered by a team of 5,000 people, operating from +30 offices across five continents. The team is united behind a single mission to make it easy for people to buy and sell almost anything, promoting prosperity in local communities. OLX Arabia is actively expanding in the MENA region in Bahrain, Egypt, Kuwait, Lebanon, Oman, Qatar and Saudi Arabia.
About John Noja
John joined OLX in January 2017 as the Country Development Manager for OLX Lebanon, where he will be responsible for growing the business and setting up the operations in Lebanon.
Prior to joining OLX, his career commenced with 5 years in BearingPoint Consulting in Paris, then he joined Strategy& (formerly Booz&Company) in Dubai, where he held several roles of increasing seniority, across various developed as well as emerging markets.
Aside from that, John also worked in the marketing department of Orange in Paris (leader telecommunication in Europe), where he was in charge of product development of customized services for VIP clients.
John’s experience was achieved through challenging roles across a portfolio of markets. His experience encompasses strategy and management consulting with 6 years of helping multinationals and SMEs, mainly in the telecommunication and digital industry, defining and implementing their strategies in different areas such as new portfolio development, geographical expansion, operating model design, organizational structure, and sales revamp or processes optimization.