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Political instability continues in Libya, and the country is listed as a fragile country. Eight years after the fall of Muammar Gaddafi’s regime, Libya which was once considered an upper middle income country with the highest GDP in Africa and one of the highest Human Development Index (HDI) rankings in the world, is faced with insecurity, unstable politics, poor infrastructure and constrained government spending. The humanitarian situation continues to worsen with about 1.1 million of people in need of assistance and protection.
Living conditions in the country have deteriorated, with a HDI ranking of 108 in 2018. The economy suffers from high inflation. This has adversely affected Libyan households and the housing backlog which continues to grow and is projected to be 500 000 units by 2020.
However, once the rule of law is restored, there will be a need for reconstruction. Infrastructure and housing should be top priorities in addition to putting in place policies and regulation that encourage the creation of wealth.
Find out more information on the housing finance sector of Libya, including key stakeholders, important policies and housing affordability:
- Macroeconomic Overview
- Access to Finance
- Housing Supply
- Property Markets
- Policy and Regulations
- Availability of data on housing finance
Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2019 edition, which has up-to-date profiles for 55 African countries.Download yearbook
Libya is in North Africa and is bordered by Niger, Chad, Egypt, Sudan, Algeria, Tunisia and the Mediterranean Sea. In 2018, the country had a predominantly youthful population of 6.7 million. Approximately three-quarters of the population lives in urban areas. Libya’s economy depends mainly on oil production. In June 2018 oil production dropped from one million barrels per day to 400 000 following an attack on the oil fields and main terminals. As a result of this turmoil, real gross domestic product (GDP) growth in 2018 dropped, but still remained considerable (estimated by African Economic Outlook to be 10.8 percent in 2019). The inflation rate fell from 28.5 percent in 2017 to 13.01 percent in 2018, due to increase in the supply of hard currency.
Political instability continues in Libya, and the country is listed as a fragile country. Eight years after the fall of Muammar Gaddafi’s regime, Libya which was once considered an upper middle income country with the highest GDP in Africa and one of the highest Human Development Index (HDI) rankings in the world, is faced with insecurity, unstable politics, poor infrastructure and constrained government spending. Fiscal spending has not reduced economic hardship caused by the lack of goods and services. In 2018 only 4.7 percent of fiscal spending went to development. Government introduced an economic reform programme in September 2018 to eliminate fuel subsidies and devaluate the dinar. This reform is expected to eliminate the important difference between the official exchange rate and the parallel market rate.
The humanitarian situation continues to worsen with about 1.1 million of people (estimated by the United Nations Support Mission in Libya) in need of assistance and protection. Living conditions, including access to clean drinking water, medical services and safe housing have declined. In June and July 2019, the number of internally displaced people (IDPs) in Libya increased from 268 629 to 301 407. Houses, schools and hospitals have been destroyed. The number of housing units to meet the deficit and satisfy the need between 2014 and 2033 is estimated at 1 164 134 units.
 World Bank (2018). Population Total Libya. https://data.worldbank.org/indicator/SP.POP.TOTL?locations=LY (Accessed 27 September 2019).
 African Development Bank Group (2018). Libya Economic Outlook: Key Facts. https://www.afdb.org/en/countries/north-africa/libya/(Accessed 18 September 2018).
 African Development Bank Group (2018). African Economic Outlook (2019), Country Notes Libya. Pg. 159
 DTM (2019). IDP and returnee report – Round 26 Libya – Mobility Tracking.
http://www.globaldtm.info/libya/ (Accessed 27 September 2019).
 Shawesh, E.M. (October 2016). Libyan Policy in the Field of Public Housing. International Journal of Research Studies in Science, Engineering and Technology, Volume 3, Issue 10. http://ijrsset.org/pdfs/v3-i10/2.pdf (Accessed 26 September 2019). Pg. 14.
Access to Finance
All economic sectors are stagnating, including the banking sector. Access to basic needs is challenging, and access to housing finance in a country listed insecure is really challenging. Bank activities are officially carried out by formal commercial banks, but there are many informal financial activities and alternative exchange rates in the informal market. Access to data of the country’s financial activities is a challenge. There are no current statistics on the number of banks operating and the central bank that is supposed to regulate the financial activities is also in crisis. High inflation, sustained liquidity crisis and rival governments all contribute to the banking crisis of Libya. The crisis has gotten worse since April 2019 when the central bank in Tripoli started enforcing restrictions on several Eastern state-owned commercial banks, which covers 30 percent of Libya’s commercial banking needs. The looming crisis is the direct consequence of the split between the central bank in Tripoli and its branches in the East since 2014.
As the power struggle to control Tripoli the capital, and consequently the country, continues. The Eastern Libyan commander, Khalifa Hafta, has mobilised the biggest military campaign since 2011. The general has advanced on the UN-backed administration in Tripoli, and the Tripoli government under the leadership of Prime Minister Fayez al-Serraj has taken measures to control the country’s finance via the Tripoli based central bank. Banking and business sources qualify the central bank restrictions as a means to limit access to hard currencies to Eastern banks, hence undermining Eastern authorities’ ability to fund themselves. Although the Tripoli-based central bank, allied to the prime minister, vowed to be neutral, there is concern that the financial crisis could hinder the efforts to reunify the divided banking system. The International Crisis Group has warned that the crisis can lead to economic disaster and that in addition to a ceasefire, Libya‘s warring sides should reach an agreement to standardising commercial banking operations in the East and work towards the central bank reunification.
 Lee, J. (2018). End to Libyan Liquidity Crisis ‘By early 2019’. Libya-Business News. 25 November 2018. https://www.libya-businessnews.com/2018/11/25/end-to-libyan-liquidity-crisis-by-early-2019/ (Accessed 26 September 2019).
 Laessing, U. (2019). After Tripoli Assault Libya next battle could be over banks. Reuters. 25 April 2019. https://www.reuters.com/article/us-libya-security-analysis-idUSKCN1S10KU (Accessed 18 August 2019).
 Zayed, A. (2019). Libya: Banking Crisis Looms amid Battle for Tripoli. CAJ News Africa.
Living conditions and access to safe housing have deteriorated in post-Gaddafi Libya. Before the political turmoil, many housing projects were under construction. To address the housing shortage, the transitional government announced the launching of a housing programme estimated at about US$100 billion. This programme has not yet been executed.
Living conditions in the country have deteriorated, with a HDI ranking of 108 in 2018. The economy suffers from high inflation. This has adversely affected Libyan households, which have lost almost 80 percent of their purchasing power. Unemployment at 17.3 percent has also led to inadequate housing. Prices of rents are accelerating well beyond the affordability of an average household. The average rent for a one-bedroom unit in city centre of Libya costs US$514 and US$319 outside the city per month, while rents for three-bedrooms units in the city centre are estimated at US947 per month and US$565 per month outside the city.
 AJ Architect’s Journal (2013). Feature: Libya US$100 billion Housing opportunities. Mirza, Abdel. https://www.architectsjournal.co.uk/home/feature-libyas-100bn-housing-opportunity/8649627.article (Accessed 22 September 2019).
United Nations Development Programme. Human Development Reports. Libya Human Development Indicators.
http://hdr.undp.org/en/countries/profiles/LBY (Accessed 3 October 2019).
 The World Bank in Libya. Overview. https://www.worldbank.org/en/country/libya/overview (Accessed 27 September 2019).
 World Bank. Unemployment (% of total labor force) (modeled ILO estimate) (2018). https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS (Accessed 5 October 2019).
 Numbeo. Cost of living in Libya (Average data for all cities). https://www.numbeo.com/cost-of-living/country_result.jsp?country=Libya (Accessed 26 September 2019).
Formal housing supply has been extremely limited since 2013. The multi-billion housing programme with Libya HIB, which was meant to be relaunched by the Libyan government in 2013, is dormant, like most of the development programmes. Many of the housing contracts worth hundreds of millions of US dollars with foreign companies such as AECOM, El-Abd and Simplex have been stopped due to the political instability and violence. The housing deficit therefore continues to grow and is projected to be 500 000 units by 2020, as announced by Mahmood Baclir Ajaj, chairman of HIB.
The political situation is not favourable for property development. The property market is static, but has potential. If the country succeeds in organising elections as programmed for 2019 (United Nations target) this would mean success for bringing the fragmented society under one central authority for the first time in years. The country could use its rich resource to reconstruct a shattered state. Reconstruction means a big market for housing and infrastructure industry.
The property market in Libya has been influenced by legislation which prevents ownership for leasing purposes. During Gaddafi’s socialism regime, one of the most important laws regarding housing development was Law n° 4 which prevented activities for profit purposes, stopped housing rents, and prevented the private sector from building houses for leasing purposes. As a result, many changes took place which led to administrative instability; there was high turnover among civil servants, both high level decision-makers and low level implementers. The merger and separation of provinces (administrative districts) was another one of the significant causes of administrative instability, which provoked confusion in the local and national housing programmes, hence contractors could not carry out their commitments.
The situation has further deteriorated with the political crisis. There are no procedures in place for obtaining a construction permit, registering property or resolving insolvency, giving Libya a ranking of 186 for dealing with construction permit and 187 out 190 countries in registering property of the World Bank Doing Business 2019 report.
In the years before the fall of Gaddafi’s regime, Libya attempted to open its real estate sector and enable foreign investment in real estate, known as Decree 21 in 2006. The decree allowed HIB to contract private and foreign developers for property development. Although foreigners can now buy real estate, a lack of clarity on property rights has prevented much uptake; and efforts to open the property and real estate markets have been significantly set back due to the sustained post-revolution instability and subsequent investor scare. Property markets have, since the revolution, been in disarray as many former owners of confiscated land returned to lobby for the reform of property laws and compensation. Draft bills on property have been brought before parliament – nevertheless, nothing has been passed due to the political fragmentation and controversy over such reforms. This is further complicated by the fact that many properties have been resold since confiscation and property registration records were destroyed in the early 1980s. It is estimated that up to three-quarters of homes in Tripoli might have been formerly confiscated properties.
Until the ambiguity of property rights is resolved, banks will remain reluctant to register property as collateral. The property market is further constrained by difficulties in doing business, and by corruption. Transparency International’s 2018 Corruption Perceptions Index rated Libya 170 in the world out of 180 countries.
 Financial Times. (2019) Libya – the battle for peace in a failing state. 20 June 2019. Financial Times. https://www.ft.com/content/993cb870-0d2c-11e9-a3aa-118c761d2745 (Accessed 27 September 2019).
Policy and Regulations
Libya housing policy and regulation in the post-Gaddafi’s era is dominated by grievances and debate about law 4/1978 – the law which prevented leases and restricted the right of ownership to one house, beyond which property was confiscated. Following the revolution that put an end to Gaddafi’s regime, former property owners’ sought justice from the transitional government and reclaimed the right to their confiscated property. The General National Congress, GNC, the legislature at the time, did introduce two laws in late 2015; law 16 that retrospectively abolished law 4 and law 20 that addressed the consequences thereof. Given the current situation, housing policy in Libya is questionable and there is no doubt that in the absence of a central government these laws can be enforced in at least half of the country.
 Springer link. Hague Journal of the Rule of Law, April 2017, Volume 9, Issue 1, pp135-156’ Suliman Ibrahim, (PhD), Director. Property claim in post-Gaddafi Libya: Political debates and justice seeking in the aftermath of law 4/1978. https://link.springer.com/article/10.1007%2Fs40803-016-0046-6 (Accessed 28 September 2019).
Libya is an oil-rich country with great potentials and opportunities in infrastructures and housing. More than US$100 billion, just for housing, has been withheld due to insecurity. Other sectors of property development are also of interest, particularly upper-standard hospitality outlets, hotels, chalets, and inns for the yet to be developed tourist industry. Libya, with its rich heritage, is a land of multiple civilisations and blessed with natural resources and a young population.
Once Libya achieves peace and stability, addressing the chronic housing shortage and providing for internally-displaced persons could become a priority. It is estimated by the World Bank that restoring Libya’s infrastructure will cost US$200 billion over the next 10 years. A peace settlement in Libya could lead to a rebound in oil outputs and exports, which could improve the fiscal deficit and current account imbalances, and allow Libya to address housing shortages and economic development. However, the political situation impedes economic progress, as projected by the African Economic Outlook with GDP growth projected at only 1.4 percent in 2020.
Once rule of law is restored, there will be a need for reconstruction. Infrastructure and housing should be top priorities in addition to putting in place policies and regulation that encourage the creation of wealth. Regarding housing, the lawful authorities should adopt policies that promote effective development, promote real estate development, protect the population, and empower Libyans to participate effectively in the reconstruction of their country
 World Bank (2016). Press Release. Economic Effects of War and Peace in the Middle East and North Africa. 3 February 2016. http://www.worldbank.org/en/news/press-release/2016/02/03/economic-effects-of-war-and-peace-in-the-middle-east-and-north-africa(Accessed 27 Sept 2019).
 African Development Bank Group (2018). African Economic Outlook (2019), Country Notes Libya, Pg. 159.
Availability of data on housing finance
The Bureau of Census and Statistics is the national body in charge of the entire county’s statistics. In spite of the political situation, the organisation continues to produce socio-economic reports to some extent. Other sources of information are essentially absent, and data is severely lacking for the housing sector. The only chamber of commerce with a functioning website is Amcham. The banking crisis has also aggravated the situation. In short, accessing statistical information is extremely difficult.
Agence Ecofin https://www.agenceecofin.com
Daily Sabah https://www.dailysabah.com
Displacement Tracking Matrix http://www.globaldtm.info
Libyan Investment https://www.libyaninvestment.com
Le Monde https://www.lemonde.fr
Leiden Repository https://openaccess.leidenuniv.nl
Libya Analysis http://www.libya-analysis.com
Libya Business News https://www.libya-businessnews.com
Libya Observer https://www.libyaobserver.ly
Mondialisation Centre de Recherche sur la Mondialisation https://www.mondialisation.ca/libye