Jordan real estate sales up 18pc
Amman, July 6, 2010
The total value of property deals in Jordan rose 18 per cent in the first six months of the year compared to the same period last year as lower prices pushed up demand and oversupply eased, according to official data.
Department of Land and Survey figures showed turnover stood at 2.337 billion dinars ($3.29 billion) up to end of end of June against 1.974 billion dinars in first quarter of 2009.
Jordan's once booming property sector was underpinned by strong demand from Iraqis, Palestinians, expatriate Jordanians and Lebanese seeking a safe haven in a country with a record of political stability.
A relentless rise in domestic property prices had fostered a preference for real estate over equities among many Jordanians whose wealth is tied to property assets.
The aid-dependant economy has been hit by the global financial crisis as investment flows from the oil producing Gulf region plummeted along with a drop in remittances from its sizeable expatriate labour force.
The official data, which includes foreign purchases of apartments and commercial property, posted a 32 percent rise in first H1 of 2010 to 148.5 million dinars compared to the same period last year.
Iraqis bought a total 92.8 million dinars worth of property, top among the list of non-Jordanian investors followed by Saudis who purchased 8.6 million dinars worth of real estate. Lebanese invested 7.5 million dinars.
The total value of property transactions fell 21 percent in 2009 to 4.74 billion dinars compared to the previous year but foreign purchases remained resilient rising 35 percent against the previous year.
Industry executives say the market was starting to show signs of recovery as oversupply in mid-and lower income housing and to a lesser extent luxury apartments eases by year-end and banks becoming less risk averse in extending property loans.
Industry analysts say the market was also expected to benefit later this year from a government stimulus package introduced in June to rejuvenate the sector by slashing fees on real estate transactions and easing curbs on credit to developers.
Prices which fell by an average 20-25 per cent in prime real estate in the capital Amman in the last 2 years should go back to a 900-1,000 dinars ($1,400) per sq m price levels by Q1 2011, analysts said.
It was currently around 650-800 dinars per square metre.
'Prices went down but with less supply as the pace of construction falls is helping push demand higher and that's why we are seeing a pickup in activity helped by banks slowly starting to lend,' Mohammed Afifi, managing partner of Century 21 Jordan, a franchise of the U.S. based property consultancy.
Gulf investors flush with oil revenue had poured over the last decade hundreds of millions of dollars into the real estate market, attracted by free market polices and relatively low prices compared with other regional markets.-Reuters