Lebanese Real Estate Bubble

I have been following real estate listings for a while now, on a daily basis. This is what I learnt:

Observations

• Most apartments that were put up for sale 6 months ago, are still for sale today. When real estate agents tell you the market is stagnant, it means they are not selling, not that the prices are stable, as they try to portray it.
• Prices are going down. Bank Audi's report noted about 4% decline in February... and an article in Dagpa Iqari stated it was a 5% decline. I am sure I wouldn't have been able to note the decline had it been that minimal.
• Real estate firms would increase the apartment price by an average of 2-3% - a random 'simsar' is likely to put as much as 50,000$ in his pocket. I guess the way it works is this: they ask the owner how much they want for the house, and anything more would be theirs. Whereas real estate firms seem to have a strict percentage they operate on.
• At some point I would look at the same apartment online, on 2 different websites and the price would vary by more than 100$/m, depending on the date posted (both by the owner).

Potential Reasons

• Businessmen found a big potential in the real estate field as the prices in Lebanon never fell before, and they had reached a poignantly high price. >>> The supply exceeded the demand, thus prices fell. 
• The Lebanese economy (as well as the global economy) is agonizing >>> people cannot afford to pay those staggering prices for their apartments, thus prices fell.
• The real estate  prices were initially over-valued >>> people refused to invest in them by fear of the bubble... and that would be the most dangerous hypothesis of all. It would mean that they will face a slippery slope and will significantly fall. There's actually an interesting article on Wikipedia on the speculated Lebanese housing bubble, it argues that 'property prices have risen exponentially since 2005 (an average 5-fold increase as of February 2010), while the GDP has risen only around 52% during the same period'.

Will we face a bubble burst soon, or is it a simple matter of supply and demand?

Le Mall Marketing Campaign - "Shopping Trip to Paris"

Apparently someone has paid more than $11, 000 for a chance to win a trip... worth about... LESS.

There's 555 coupons for a certain Juliane, each worth $20 according to the listings on stopjessica.com, stopjad.com, stopcarol.com, stopzeina.com, stopmaya.com (which by the way, all, just link to the Facebook application). 

 

Only about 3800 likes on Le Mall's Facebook page, a rather average interaction rate, and yet the top 50 "unstoppables" boast numbers that seem way up in the clouds... 

That part obviously reads "fishy" to me. Even more so that the full name of those "unstoppables" is not written. Oh, and their Facebook manager (with great writing skills - honestly -) needs to do something about those long status updates!

 

"Hasn't anyone told them yet that their advertising campaigns suck?" stated a very reputable friend in the advertising industry upon hearing LeMall's latest radio ad. 

I don't quite agree actually.

I was intending to praise this campaign... I should get back on track. I find it ingenious!

For once a campaign that aims to raise sales, engage with clients and above all reward them... and my favorite part? It's an integrated marketing campaign. 

I would calculate the success of this by measuring the amount of new sales generated, versus that of the previous month, minus the campaign costs. Uh, ok, I am making it impossible for it to be a "winner".

...But seriously, I do like it. At least they would have created themselves a Facebook fan base for future campaigns and got new people to interact with them! (Which could have been done with Facebook ads alone, with, at least, 20 times less the cost.)

ok, I give up! 

It's a good campaign, yet, likely to cost more than to generate. Although, the campaign seems so awesome and creative (ok, not creative, ...yet it's spot on the Lebanese female mall consumer). 

Let's call it ambitious.

...But hey! At least they did it all legally:

Did you know that it takes a permit from the ministry of Finance for any draw to take place? Even if they were just to win coupons! Moreover, such draws have to be governed by the Lebanese National Lottery... And Le Mall did it right. Yey for that! 

E-commerce in Lebanon: Ready or NOT

It was 2009, all excited, we opened a brand new shop. Full of hopes and ambitions, not knowing what the market was like, we quickly jumped into e-commerce. 

We laughed at the thought of the limited amount of e-commerce websites in Lebanon: such a wasted opportunity, right? Wrong. 

A major lesson in market selection (recalling post-graduate Marketing lessons) is that when you think you found an untapped market that seems like a great investment... well, think again.

There's a reason why all those investors have avoided it... and this was a fact. They weren't stupid, uneducated, or incapable, as many highly active Lebanese internet users seem to think. They knew better. They knew that the market was not ready yet.

We carefully went for "payment upon delivery"considering the Lebanese reluctance of paying online. Well, guess what? It was not just the online payment that seemed to be the barrier. Lebanese really like to be guided in their purchases. Very few online purchases were completed without a prior phone call! 

"Hello, I would like to buy this item on page 3, do you think it's a nice color?"

"Hello, what do you think of this product? Would it be nice for my father?"

Case in point - 1 - Lebanese like to have a second opinion. The salesperson seems to be a must. 

-Hello, I was on your webiste, there's this item I want to buy...

-There's something called "add to cart" and then you get a form to fill.

-Yes, but since I called, do you mind taking the information?

Case in point - 2 - Lebanese seem to dislike self-service? Or maybe they just cannot deal with procedures?

 

Whatever the reason, the lack of e-commerce websites in Lebanon is mainly due to a resistance from the market rather than from the organizations. The field is not as lucrative as it may appear to be; unless you offer some really good incentives for people to go for an online bargain... Something that Groupon-like models have successfully adopted.