127 complaint in December 2019
This map shows the geographical distribution of complaints recorded by the Housing Monitor of individuals who failed to pay their home loans. The sample was gathered through a questionnaire that was published on social media, which implies that the questionnaire was not equally accessible to different regions and social categories. Nevertheless, we consider that the number of cases received and the speed with which they were reported (the first 100 cases came within less than 48 hours of publishing the questionnaire) allow us to draw preliminary conclusions about the conditions of families that have become unable to pay the monthly loan installments.
The largest number of reported cases came from the North Governorate (54 cases, including 31 in Tripoli), compared to 42 cases from the Mount Lebanon Governorate, despite the fact that, according to the statistics of the Public Institution for Housing, Mount Lebanon contains the largest number of the Lebanese population as well as the largest proportion of home loans (60% of all housing loans). The geographical distribution of cases coincides with other indicators on the national level, most notably the high level of poverty and the lack of basic services.
While the publishing mechanism of the questionnaire may explain these figures, it should be noted that, prior to the crisis, the monthly income of 80% of the cases was five times the minimum wage (Graph 1 in article), i.e. below LBP 3,375,000.
Looking into the housing prices in these cases (Graph 2 in article), we see that the five lowest-income respondents bought the cheapest homes, which is also reflected in the average loan value for this category (Graph 3 in article).
Notably, people with lower incomes are more likely to default, despite the small size of their loans and their purchase of cheaper houses in poorer areas. This is because they spend a greater portion of their monthly income on loan payments in comparison with higher-income borrowers (Graph 4 in article). So, the burden of the loan increases as the value of the loan decreases due to the borrower's low income in the first place.
Thus, the numbers clearly show that the crisis has exacerbated inequality and increased the vulnerability of a group that was already and significantly more vulnerable.