Housing Finance in Libya


For the French version of this country profile, click here.

To download a pdf version of the full 2018 Libya country profile, click here.

Libya’s economy depends on the oil industry; oil revenue accounted for 38.5 percent of total nominal GDP and oil accounted for 97.2 percent of total exports in 2014. The national unrest in Libya not only destabilised the economy but it also had dire social impacts. The real GDP growth was estimated at 55.1 percent in 2017 after three years of economic contraction, due to a significant increase in oil production (from 400 000 bpd in 2016 to 900 000 bpd in 2017) and a slight increase in oil prices. Before the conflict, there was a wave of political and social grievances due to an acute shortage of housing units. Currently an estimated 435 000 out of the population of 6 million are internally displaced, and houses, schools, and hospitals are destroyed.


Development of Libya’s financial sector has stagnated due to Libya’s instability, high inflation, and a sustained liquidity crisis. Bank lending for housing finance is restricted by high collateral requirements, the inexistence of a Libyan land register or a credit bureau, and inadequate central bank regulation. The ratio of housing finance to GDP is estimated to have remained low at below 1 percent. The banks’ poor targeting of home loans as well as poor repayment enforcement distort the housing finance market and restrict the development of a functioning mortgage system. Today, it is particularly difficult for low income or small borrowers to access finance for housing.


Libya’s minimum wage in 2018 is LD450 (US$325).16 Overall unemployment was estimated at 17.7 percent in 2017 and even higher for youth – up to 45.96 percent – with most of the unemployed holding university degrees. Owing to the political state of affairs and a disruption in business, the unemployment rate has remained high and the earning capacity of Libyans has continued to decline. Given the housing shortage, rental shares have escalated beyond the affordability of an average household; a one-bedroom unit in central Tripoli costs between US$400 – US$600 per month, while rents for units outside the city centre are estimated at US$376 per month.


Housing was identified as a key priority in Gaddafi’s regime where public housing supply was financed with oil revenue and zero percent interest rates were offered until there was a housing surplus. A decline in revenue from oil reserves created an unfavourable economic climate for investors which had a negative impact on housing supply. Since then, Libya’s property market has been influenced by legislation which prevents ownership for leasing purposes. One of the most important laws regarding housing development during Gaddafi’s socialism regime, was Law n° 4 which prevented activities for profit purposes, stopped housing rents, and prevented the private sector from building houses for leasing purposes.


The property market is constrained by difficulties in doing business, therefore, it will be useful for the ambiguity of property rights to be resolved –a measure that will encourage banks to register property as collateral. The housing sector relies on the political climate of the country because politics inevitably facilitate or limit the ability of the country to deliver housing stock.

Find out more information on the housing finance sector of Libya, including key stakeholders, important policies and housing affordability:


Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2018 edition, which has up-to-date profiles for 54 African countries.

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