Demand for residential real estate in Lebanon dropped in the first quarter of 2020 to its lowest level on record, as reflected by the results of the Byblos Bank Real Estate Demand Index. The Index posted a monthly average of 27.3 points in the first quarter of 2020, constituting a decrease of 16.5% from 32.7 points in the fourth quarter of 2019 and a decline of 51.3% from 56.1 points in the first quarter of 2019. This follows the Index's retreat by 22% in the fourth quarter and by 10.2% in the third quarter of 2019. The Index reached 29.5 in January 2020, down by 38.6% from the same month of 2019, while it dropped by 57.2% annually to 28.8 in February and by 55.5% to 23.6 in March 2020, its third lowest level on record.
 
The Index's average monthly score in the first quarter of 2020 came 79.2% lower than the quarterly peak of 131 points registered in the second quarter of 2010, and was 75.2% below the annual peak of 109.8 points posted in 2010. Also, it was 52.7% lower than the Index's monthly trend average score of 57.7 points since the Index's inception in July 2007. 

Several factors drove demand for residential real estate to fall to its lowest level since the Index's inception in July 2007. First, the deteriorating socioeconomic conditions that led to the eruption of nationwide protests in October 2019 worsened in the fourth quarter of last year and into the first quarter of this year, which shifted the attention of citizens away from major investment decisions. Second, the jump in consumer prices and in the cost of living resulted in the rapid deterioration of the purchasing power of citizens and a drop in household confidence, which made potential real estate buyers reluctant to build or acquire a residential unit as they have been forced to address more urgent and basic needs. Third, the continued absence of a comprehensive housing policy and of government measures, such as tax incentives, to support demand for any segment of the residential market in Lebanon have deterred demand. Fourth, the migration of some deposits out of the banking sector towards real estate in recent months targeted land and built property, but this did not have a significant impact on the residential market.