Real estate prices in Syria go up tenfold


Economy | 17 Apr 2021 | Malek Al-Hafiz

Over the past few months, real estate prices in Syria have increased in an unprecedented way, coinciding with the deterioration of the economy and the collapse of the Syrian pound's exchange rate against the US dollar.

Since the beginning of the current year, real estate prices in the areas controlled by the Syrian regime have increased between 10 and 20 percent, as the local newspaper Al-Watan indicated that there were no indications of a decline in real estate prices in the coming days.

A report published in the newspaper in mid-February said the main problem with rocketing real estate prices is related to its incompatibility with the Syrians’ income and not with the actual expenditures, pointing out that the cost of building per square meter during the current period ranges between 250,000 and 300,000 Syrian pounds. 

In addition to these costs, the report referred to the price of land plot, the licenses' fees, and the profits of the contractor, while explaining that the price of the property differs from one region and another for reasons related to its location, as well as the differences of land prices from one area to another.

In a related context, President of the Syrian regime Bashar Al-Assad approved a new law regulating real estate sales, including the determination of tax value on sold and leased properties.

Law No. 15/2021, published by the Presidency of the Republic on 29 March, stipulates that “specialized and expert committees shall determine the actual value of real estate.”

The Syrian Presidency said that this step will contribute to achieving "unprecedented tax justice," explaining that these committees use digital, credible and automated data and estimates without human intervention, which "prevents corruption in collecting taxes on the sale of real estate."

The Syrian Presidency added that according to the law, the price of a square meter of residential and commercial real estate will be determined in all cities, regions, and towns through specialized committees. The value of real estate will be fixed in an automated system as a reference for determining the tax on sales according to the tax rates clearly stated by the law; which means that the human role in fixing the tax by linking sales contracts with the marketable value of real estate registered in pre-automated data systems.

Economic expert Naim Loman told Rozana that the old system of taxes on real estate sales was based on appraisals made by the specialized committees, which means that fixing the value of the tax is based on the intervention of the human factor. However, the new law stipulates the use of the Geographical Information System (GIS), which is specialized in processing spatial and descriptive data.

"By means of this system, the tax on real estate sales and rentals will not be defined by appraisals or a fixed amount, but will be rather counted according to a specific percentage of the price per square meter of land, and the higher the price of the property gets, the higher the treasury revenues from taxes would be."

Why did houses’ prices increase?

Some local press reports claimed that the rapid increase in houses’ prices can be attributed to the fact that a large segment of Syrians are more inclined to work as brokers in this sector due to the lack of good job opportunities that secure a decent income. Thus, some real estate are bought and sold between traders in closed-loop circles, which led to an important rise in prices.

The regime-controlled areas are witnessing a dramatic rise in the prices of building materials for many reasons, the most prominent of which is Caesar Act sanctions imposed by the US, in addition to the aforementioned factors, including the collapse of the Syrian pound exchange rate and the scarcity of foreign exchange in the central bank.

Real estate prices underwent a rise earlier last year, when the Syrian regime's government decided last August to raise the price of a bag of cement (50 kilograms) from 2,300 Syrian pounds to about 3,500 Syrian pounds, making the price of a ton of cement (20 bags) go up to about 69,000 Syrian pounds.

The difference between the price of cement of government factories and the market price of cement manufactured by the private sector remains very significant, marking a difference of more than 100 percent, which added momentum to black market exchanges of government- produced cement.

On the other hand, the prices of iron rods (used in construction) have increased dramatically in the recent period, as the price per ton reached about one and 500,000 Syrian pounds, compared to 250,000 pounds in 2019.

The cost of interior finishes of a 100-square-meter apartment has risen to between 10-15 million Syrian pounds, according to the local economic website B2B.

Real estate prices in a decade 

At the beginning of 2011, one US dollar was equal to 47 Syrian pounds, and the price of a square meter in the city of Damascus was estimated at 80,000 Syrian pounds as a start, while a square metre of land in the countryside of Damascus was priced starting from 15,000 Syrian pounds.

In late 2013, the price of the dollar rose in an unprecedented way when to reach 300 Syrian pounds. The price of one square meter (without interior finishes) in the city of Damascus amounted to 125,000 pounds, while in the countryside of Damascus the price of a land plot reached 40,000 per meter.

In mid-2016, one dollar cost 645 Syrian pounds, the price of one square meter (without interior finishes) in the city of Damascus reached 300,000 pounds, and in the countryside of Damascus it amounted 80,000.

In late 2019, the US dollar exchange rate reached 700 Syrian pounds, one square meter (without interior finishes) in the city of Damascus was sold for 500,000 pounds, and the price of one square meter (without interior finishes) in the countryside of Damascus cost 125,000 Syrian pounds. 

By the end of 2020, the US dollar was sold at 2,750 Syrian pounds per dollar, and the price of a square meter  (without interior finishes) in Damascus cost between 700,000 800,000 pounds, while in the countryside of Damascus a square metre of land was sold for 400,000 pounds.

In early February, the exchange rate of the US dollar crossed the barrier of 3000 Syrian pounds per dollar, while at the end of the same month the exchange rate reached 3,750 Syrian pounds per dollar.

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