Damascus- The phrase “real estate sleeps (or gets sick) but does not die” that is present in Syria indicates the importance of ownership in the Syrian conscience, and its consideration as a guarantor of savings, no matter how stagnant the market is or how the currency collapses.
To achieve this reassurance, a difficult journey is required, starting with the exorbitant prices and not ending with the control of brokers, then submitting to the unfair collection policies imposed by the regime or the means of evasion according to the different categories of real estate.
Real Estate Market
Supply and demand govern the real estate sector in Syria, with the absence of clear standards for pricing per square meter, and the overlap of location, services, and type of real estate registration factors in determining prices.
The “bazaar” is the essence of completing deals, and it usually takes place within real estate offices in the presence of some office owners, the buyer, and the property owner. The attendees tend to approximate the difference and then reach an agreement, and the pricing remains subject to whims and manipulation.
In the upscale neighborhoods of Damascus, prices range between 1 billion Syrian pounds ($73,163) and 7 billion pounds ($512,145), and house prices in the Damascus countryside range between 200 million pounds ($16,163) and 550 million ($40,239), reaching 1 billion ($73,163) in some cases, depending on modern equipment (finishing) and the availability of electrical energy alternatives, while the prices of illegal properties that penetrate the capital remain below 150 million ($11,000).
Monthly rents exceed 3 million liras ($220) in the capital’s middle-class neighborhoods, and are nearly half that in the suburbs. The tenant is also required to pay at least 6 months’ worth at the beginning of the contract, for fear of the lira’s deterioration in value.
The maze of rentals has become more complex as real estate office owners have refrained from dealing with them and have focused on sales operations. Rental deals have been left to the “shaqi’a” or “huwaisa” as they are popularly known, meaning the roaming brokers who do not have offices and are committed to the minimum standards of the profession. This is a profession with a reputation for speculation and exploitation of the needs of clients.
Types of ownership
Real estate has several ownership categories, and prices and procedures vary according to their classification. The strength of the “proof” of ownership of the property is graded from the “Tabu” or contract of all types first, which is the ideal case.
The court ruling gives an individual (the buyer) ownership of a property next, and the property can be transferred to the buyer in the registry under the ruling after paying the financial dues, but the general behavior is to place a note in the registry.
This is followed by ownership under an irrevocable notary public agency, where the seller appoints a general agent for the property who is the buyer. The last two models have emerged within the sales operations conducted by real estate investors or office owners, where the purchase is made with the intention of selling and achieving a material profit, so the transfer of ownership is not completed and is left to the next buyer.
These main categories branch out into various cases, especially after inheritance or state ownership. For example, ownership can be proven through an electricity bill within the areas of violations.
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Interveners
Dr. Louay, who traveled to Europe 6 months ago, says, “In 2021, I planned to travel and specialize, and I needed to secure an amount to obtain a visa. My village is 40 kilometers away from the capital, and the family owns several lands, of which selling (1-2) dunums was enough to secure the travel amount.”
He added to Al Jazeera Net: “I offered the property to interested friends, relatives and expatriates from the village. The process took two years, with a loss of 70% of the land’s value, due to the economic situation and the village’s distance from the city centre after it had been an investment and tourist destination. The sale was made at a low price because of my need to get out.”
Nadim, a young real estate investor, says that the market movement is limited to brokers who exploit the needs of exhibitors, and some who want to freeze a sum of money in a property until it is resold. He downplays the impact of expatriates on the Damascus real estate market, as it is impossible to talk about sales movement as long as demand is limited to dollars, and this has its risks and difficulties.
The role of the judiciary
Syrian law requires depositing half of the current value of the property in banks since February 2023, and the state determines this value regardless of the value of the contract. This freezing of financial blocks has led many to abandon contracts and take a judicial path leading to a court ruling.
“Resorting to property registration by court order was exceptional, as a property before the division or owned by heirs, but after the decision of the prevailing value, it became the main way to avoid the large sums collected by the state. There are prevailing values higher than the actual value of some properties, and this is related to corruption, as owners are forced to pay bribes in exchange for evaluating their properties at a less unfair prevailing value,” explains lawyer Wafaa, a professor at the Damascus Bar Association branch.
The lawyer told Al Jazeera Net about the consequences of this approach: “The damage will include the real estate registry and the competent courts, as real estate problems will increase and become more complicated, and the registry will turn into signs of lawsuits and unregistered sales, and with the accumulation, the door will be opened to the loss of rights. Also, the role of the court will change from resolving disputes to a place for registering sales.”
Market recession
The Syrian newspaper Al-Watan quoted engineering economist Muhammad Al-Jalali as saying that there is a recession in the real estate market and a slowdown in construction activity, adding that real estate prices have decreased compared to the inflation of other commodities.
Nadim explains the reasons for the recession, saying: “The most important reasons are the weakness of purchasing power, and the slow pace of construction leads to recession. When cladding is disrupted due to the high prices of materials, the owner waits to avoid losses due to the continuous decline in the currency.”
Possible solutions
Since the issuance of Law No. 10 of 2018, concerns expressed by activists and human rights activists regarding real estate ownership in the country have increased. According to a legal paper issued by the organization “Syrians for Truth and Justice,” the law does not include the minimum required to protect the rights of owners, which is further evidence of the government’s unfair use of the right, making it a continuous tool for arbitrary confiscation of property.
Lawyer Wafaa says about the necessity of establishing a fair ownership law, as ownership exists around the world and may be for the public good, but within fair compensations, while the current law is very unjust, according to her.
“Achieving an organized real estate market requires massive work at the state level, starting with restoring damaged documents. Although a law has been issued in this regard, it is not activated, and many records have been damaged and are not automated. The most important factor is that corruption is entrenched in all aspects of work with state agencies, and there is massive manipulation in the real estate sector, so enacting laws will not protect people’s rights in this situation,” she added in a comment to Al Jazeera Net.
For his part, Nadim believes that working legally is a loss, as the government shares the profit but does not share the loss, imposing complex conditions and forcing the freezing of funds in addition to large taxes. Therefore, there is a need for fair laws and the establishment of a specific evaluation mechanism that controls prices in line with the costs of construction, in contrast to the popular market culture currently prevalent, which relies on knowledge, trust, and the responsiveness of the parties to the sale with each other and with the conditions of supply and demand.
He confirms that there is a loss of confidence in real estate offices and even the offers circulated online, as they mostly aim to raise prices in an imaginary way.
The Syrian real estate market is staggering between legal loopholes, which are almost mandatory passages imposed by the regime’s taxation policies. Regardless of the economic benefit it achieves from citizens at every junction, it is noticeable that it is heading towards chaos under unsafe legal instructions, with most residents abandoning the ambition of owning a home in the capital, where the price of a grave has reached 150 million liras ($11,000), while 90% of the population is languishing below the poverty line, according to the International Committee of the Red Cross.
