Tuesday, September 7, 2010

Bubble, Bubble, here comes trouble...

A story carried by Bloomberg today notes that Beirut is the 10th most expensive city in the world for expat housing:

"The city is ahead of Paris, Abu Dhabi, Amsterdam, Geneva and Rio de Janeiro and behind Singapore, Osaka, New York City, Moscow, Hong Kong and London...."

Actually, the phenomenon is not just for expat housing. I suspect that when average home prices are compared to average incomes in Lebanon, US sub-prime buyers would appear financially prudent.


  1. I agree - the bubble is going to burst no matter what the "experys" have to say about the so-called "fundamentals". We can't all forget that Dubai placed bets on the "strong fundamentals of the real estate market" and we know how that ended.

  2. What puzzles me is the source of the leverage in the system. Real estate lending is a relatively small part of the banking sector's balance sheet. So, is it all developer financing? When the bubble does burst, who will end up with the bad debt or bad assets?