Real estate financing in Syria: past and present

Before 2011, real estate financing in Syria relied mainly on traditional banking channels, amid a remarkable construction boom that accompanied economic openness and the initial entry of private banks into the Syrian market. The structure of real estate financing during that period can be detailed as follows:

Real Estate Market Before 2011

• Construction Boom and Rapid Growth: The period between 2005 and 2010 witnessed active construction and a significant rise in real estate prices, driven by increased domestic demand and the inflow of expatriate capital.
• Entry of Real Estate Developers: Law No. 15 of 2008 on real estate development and investment was issued, opening the door for the establishment of real estate development companies and the construction of organized residential suburbs around major cities.
• The Rise of Informal Settlements: The housing market faced a deficit in providing adequate housing for low-income groups, leading to the expansion of informal housing neighborhoods (building violations) surrounding Damascus and Aleppo, accommodating a large proportion of the population.

The Role of Public and Private Banks

• State Real Estate Bank: It was the main driver and dominant force in real estate financing, providing traditional mortgage loans for buying, building, or finishing homes, and relied on a housing savings deposit system to schedule loan disbursements to citizens.
• Savings Bank and Other Public Banks: They contributed secondarily by offering housing loans to public sector employees with subsidized interest rates and extended repayment terms.
• Private and Islamic Banks: Entered the real estate financing field strongly after 2004, offering flexible and fast financing products for purchasing apartments, villas, and commercial real estate, but with higher interest rates and profits compared to public banks.

Key Problems of Real Estate Financing Before the Revolution

• Weak Purchasing Power: There was a huge gap between low wages and salaries (especially in the public sector) and the skyrocketing prices of standard apartments, making loans insufficient to cover the property value.
• Complex Collateral and Mortgage Conditions: Banks required a clean property record (official green deed), which deprived a large segment of residents in informal areas and shared ownership properties from obtaining any financing.
• Limited Loan Ceilings: The financial ceilings set for loans by the Real Estate Bank were low and did not match the real market value of properties in city centers, forcing buyers to rely on personal loans or savings to cover the difference.
• Long Waiting Periods: The government housing savings system suffered from bureaucracy and procedural delays, causing loan disbursements to be delayed for many years, during which the currency would lose part of its purchasing power.

What Happened to the Real Estate Sector During the Revolution?

The real estate sector in Syria was deeply and directly affected during the years of the revolution, transforming from a growing and active sector to a market suffering from severe structural distortions due to military operations, mass displacement, and demographic and economic changes. Details are as follows:

Collapse of the Real Estate Market in Vast Areas

• Massive Infrastructure Destruction: Residential neighborhoods and entire cities suffered total or partial destruction (such as large parts of Rural Damascus, Eastern Aleppo, and Homs), causing millions of housing units to go out of service completely.
• Halt of Real Estate Development Projects: Contracting companies and real estate developers withdrew from work, and plans to establish new residential suburbs were halted due to lack of security and basic building materials.
• Paralysis of Buying and Selling and Fragmentation of Ownership: The wide-scale displacement and refugee movement froze real estate markets in hot cities, and the loss or damage of many official property records in some areas created complex legal dilemmas regarding proof of ownership.

How Did Real Estate Prices Change?

• Market Split and Sharp Price Disparity: Real estate markets were sharply divided; property prices collapsed in hot or destroyed areas due to lack of buyers, while prices soared in safe areas (such as major city centers like Damascus and coastal areas) due to heavy displacement and concentrated demand for housing.
• Inflation and Loss of Lira Value: Nominal property prices in Syrian lira multiplied thousands of times to keep pace with the historic collapse in the exchange rate, and the market gradually shifted to unofficial pricing in US dollars as a safe haven to preserve asset value from ongoing inflation.
• Record High Rents: Safe areas faced a severe housing crisis, pushing rental values to levels far beyond citizens' purchasing power and several times higher than employee incomes.

 

Major differences between regions can be observed by following current real estate price indicators in Syria.

 

Near-Total Halt of Real Estate Financing

• Freezing of Bank Loans: Public banks (especially the Real Estate Bank) and private banks stopped granting housing loans and construction facilities for long periods during the revolution years, to limit financial risks and due to citizens' inability to repay.
• Liquidity Shortage and Crisis of Confidence: Banks suffered from a severe shortage of cash liquidity due to deposit withdrawals, and investors refrained from borrowing because of exchange rate instability and the difficulty of providing safe and reliable property guarantees (green deed) under current conditions.
• Complete Dependence on Self-Financing: Organized financing mechanisms disappeared entirely, and rare purchase operations were limited to direct personal financing (cash), personal savings, or funds transferred from expatriates abroad.

Real Estate Financing in Syria Today… What Has Changed?

The Syrian scene is witnessing a radical transformation in the financial and real estate landscape, as this year marks a pivotal stage for the return of real estate financing as a key tool to support the market and meet the needs of citizens and investors.

The features of this change, its underlying drivers, and the challenges it faces are as follows:

Return of Real Estate Financing Discussions

• Relaunching Housing Loans with Higher Ceilings: Public and private banks have raised the ceilings of real estate loans to levels compatible with prevailing prices of residential and commercial units.
• Emergence of Specialized Real Estate Financing Companies: New financial institutions specializing in real estate and Islamic financing have entered the market, offering flexible financing products with extended repayment periods.
• Focus on Group Loans and Finishing Loans: Financing programs targeting housing associations and real estate developers have been activated, in addition to loans dedicated to finishing properties "in shell condition".

Why Has This Topic Returned Now?

• Lifting of Sanctions and Economic Openness: The lifting of international sanctions and activation of the SWIFT banking system led to an inflow of cash liquidity and regional and expatriate capital into Syrian banks.
• Stabilization of Exchange Rate and Lira: The recent financial stability has given banks a clear vision to calculate risks and long-term loan interest without fear of money losing value due to inflation.
• Reconstruction Projects' Need for Financing: Modern urban cities (such as Marota City) and new residential suburbs require massive and sustainable financial liquidity that cannot be secured through individual cash payments alone.
  

 

Attention is currently focused on modern real estate projects that offer investors the opportunity for early purchase.

 

Current Challenges Facing Any Real Estate Financing System

• Gap Between Income and Monthly Installments: The required monthly installment for some high-value loans still exceeds the financial capacity of a wide segment of employees and low-income earners.
• Complex Property Guarantee Conditions: Banks require a property record free of restrictions (official green deed), which is still not available in informal and unregulated expansion areas.
• Rising Construction Costs and Materials: Global fluctuations in basic material prices (such as iron and cement) pose a challenge for developers and borrowers to fix the final execution costs of properties under construction.

Recent legislative and governmental decisions have brought about a qualitative shift in the structure of the Syrian real estate market. The laws attached to the new investment law and recent banking facilities have simplified the procedures for expatriates and regional companies to acquire property. The activation of international money transfers and restructuring of property fees have increased transparency and reduced random sales, providing a legal and financial environment attractive to investment capital.

Are Real Estate Investments in Syria Today an Opportunity or a Risk?

Real estate investment in Syria today represents a golden investment opportunity mixed with calculated risks, and this balance can be detailed as follows:

• Opportunities: The opportunity lies in the current low asset prices compared to neighboring countries, rapid capital growth due to the lifting of sanctions and the launch of reconstruction projects, in addition to the high rental returns of commercial properties, which range between 8% and 12% annually.

• Risks: Risks are limited to the possibility of buying in areas lacking infrastructure, or entering properties with complex legal records (shared ownership or unregulated violations), as well as varying finishing levels and delays by unreliable developers.
• Conclusion: Buying in modern regulated areas (such as Marota City) or through approved real estate development companies turns investment into a completely safe opportunity that guarantees capital growth and protection. Today, investors are looking for real estate opportunities that balance safety and investment return.

The Future of Real Estate Financing in Syria in the Coming Years

Real estate financing in Syria is heading towards a phase of prosperity and widespread expansion thanks to current economic changes. Future projections indicate the following:

• Expansion of Banking Products: New financing tools are expected to enter the market, such as "long-term mortgage" (up to 20 years) and joint real estate investment funds.
• Reliance on Digital Financing: Electronic banking platforms will play a pivotal role in speeding up the approval process for real estate loans and tracking payments.
• Revival of the Development Sector: The reliance will shift from individual (cash) financing to institutional joint financing between banks and developers, which will help reduce apartment prices and increase the supply of residential and commercial properties. It is also expected that reconstruction projects in Syria will play a key role in stimulating real estate demand and encouraging new investments in the coming years.
  

What Does Real Estate Financing Need to Succeed in Syria?

To maximize the benefits of the real estate financing system and ensure its sustainability, the market requires several key pillars:

• Installments Matching Income: Lowering bank interest rates and innovating flexible financing formulas to make the monthly installment compatible with average local salaries and wages.
• Accelerating Real Estate Regulation: Speeding up the resolution of informal area problems and converting them into regulated areas with clean property records (green deed) to qualify for bank loans.
• Establishing Credit Risk Guarantee Companies: Creating institutions to guarantee loans for individuals and developers to banks, reducing excessive guarantee requirements and facilitating credit granting.
• Stability of Monetary Policies: Maintaining exchange rate stability to encourage banks to provide long-term loans without fears of sudden financial fluctuations.

Contact Us for a Real Estate Consultation Tailored to Your Needs

Whether you are an expatriate wishing to invest your money in guaranteed assets, or looking for an apartment with easy payment plans and financing facilities, the Imtilak Real Estate team is ready to serve you.

We offer you a precise financial analysis to choose the property that matches your repayment ability, and present you with the best options for apartments, villas, and commercial offices in the most prestigious areas of the capital and Syrian cities.

We also guarantee safe transactions and thorough verification of supporting documents and licenses before signing any contract. Contact the Imtilak Real Estate team via WhatsApp to get a free consultation to help you choose the property that fits your budget, understand available payment options, and ensure the legality of procedures before making a purchase decision.