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French Version

Real estate market in Jordan looks for better times

REAL ESTATE prices in Jordan are intrinsically linked with supply and demand.

REAL ESTATE prices in Jordan are intrinsically linked with supply and demand. The housing sector in the country and Amman in particular witnessed a rapid decline in prices in the past three or four months because of the increased number of empty apartments and under-utilized lands.

A recent report in Ad Dustour Arabic daily found real estate prices decreased by as much as 25 percent over the last year due to the large number of properties put on the market.

Economic experts agree, and believe such a decline reflects the current recession in the local economy. Although many landlords still think their properties are safe, others have been forced to sell many of their buildings just to keep afloat.

Government sources however, have a different point of view. “All indications show real estate prices and properties in Amman have a constant growth momentum,” said Abdel Mon’em Al Zu’bi, director-general of the Lands and Survey Dept.

Al Zu’bi told The Star the current trade volume of landed properties in Jordan is estimated at around JD 130 million, and made a 20 percent increase in revenues from sales in the first quarter of this year. According to the Ad Dustour report, however, much of the real estate in Amman has been bought with a mortgage, but it didn’t show a substantial change in property prices in the West Amman districts. Most of the rapid decline in land prices was in East Amman and on the outskirts of the capital. Mohammed Al Bashiti, owner of the Amra Real Estate Bureau, said land prices are seasonal. “Prices usually rise in summer when Jordanian expatriates and tourists come into the Kingdom, unlike winter when prices decline because of the slowdown in the local market,” he added.

Nevertheless, observers believe land prices in Jordan are different according to where you live. While landlords in Amman are fearful of an expected downturn, their counterparts in Aqaba are preparing themselves for an imminent increase, thanks to the Aqaba Special Economic Zone.

Since the zone was launched in February, lands there witnessed an increase in prices. Some landlords want as much as JD100-120 per square meter of land. Al Zu’bi noted location and the type of landed property play a key role in determining prices. “There is an increase in projects dedicated for housing and furnishing purposes,” he said. These are mainly in the northern districts of Amman, such as Khalda, Umm Summaq and Marj Al Hammam. Al Bashiti said the Wasfi Al Tal Street where his office is located, is suitable for commercially-oriented investments rather than housing-oriented ones. “It is difficult to make a general judgment or an estimate for all the areas in Amman,” Al Bashiti noted. Although, lands located near the University of Jordan and the City Center have the required infrastructure, unlike those on the Airport Highway or to the south of the capital for instance.

According to Al Bashiti, many of the landlords who bought their lands on the Airport Highway in the mid-1990s now want to sell them for half the price they initially paid. “One of the reasons for this is many landlords were expecting a business boom in Amman soon after the signing of the peace treaty between Jordan and Israel in October 1994.” Many businessmen and investors, added Al Bashiti, were expecting a fortune as Jordan’s economic ventures were highlighted through foreign investments to the Kingdom in the form of joint ventures.

Al Zu’bi, meanwhile, made clear commercial investments in Amman are subject to special circumstances such as project type, its area and location. “The real estate business in Jordan is much affected by the political and economic development in the region,” Al Zu’bi explained. “However, there are Arab and non-Arab investors and businessmen who come to the country, build their houses and live here.” But this reality depends on the principle of reciprocity, especially for non-Arab nationalities. Arab businessmen are most welcome to come and own properties. “Germans, for example, can have the same hospitality because they let Jordanians own land in Germany,” Al Zu’bi added. He denied news that Israeli businessmen own lands in Jordan. “They can do so only if their law allows Jordanians to have the same right in the Jewish State.” The Lands and Survey Department makes about JD 60-70 million in revenues each year, more than 50 percent of which comes from land registration fees. While Al Zu’bi sees in these revenues evidence of the rapid growth in the property business, Al Bashiti said Jordanians can only buy lands if they have the will to buy and pay with cash, something which many ordinary Jordanian families simply can’t do.

Ghassan Joha
The Star

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