Government initiatives bring stability to Jordan’s real estate

The Jordanian government's tax breaks and competitive offers from the kingdom's developers have resulted in a stable sales market despite oversupply of housing units, according to leading real estate consultancy Asteco. Prospective buyers in Jordan are taking a cautious approach to investing by seeking out smaller units offering the best value for money, stated Asteco in its latest report. To motivate buyers, both the government and developers have put several incentives in place to alleviate the oversupply the market witnessed in 2016. In line with these efforts, prices have remained stable throughout the year and over the quarter, but resulted in a reduction in transaction levels, according to the Asteco Jordan Real Estate Q4 2016 report. “The oversupply in the residential sales market has put pressure on developers to be more competitive to sell their properties while the government has introduced new tax saving measures to help stimulate the market,” said John Stevens, the managing director of Asteco. “The new initiative, which waives the registration fee for the first 150 sq m of any home smaller than 180 sq m is feeding the trend for buyers looking for smaller units that are competitively priced - especially in the densely-populated capital city, Amman," noted Stevens. Sale prices for apartments remained stable across the board during 2016, standing at an average of JD1,375 ($1,932) per sq m for units in Abdoun and 4th Circle, JD1,250 in Um Othainah, JD1,200 in Der Ghabar, JD1,188 in Sweifieh and JD1,100 in Al Rabiah. The International Monetary Fund has predicted that Jordan’s economy will gradually gather pace over the next few years, with GDP expected to reach 3.3 per cent in 2017 and 4 per cent by 2019 – a momentum that could provide a welcome boost for property sales. One upcoming project in the spotlight is Al Abdalli, a mixed-use development in Amman that will comprise residential, office, retail and hotel components over a total built-up area of 2 million sq m. “Although the market is going through a sluggish phase and transaction levels have reduced, sales are still taking place,” revealed Stevens. “It is hoped that the climate will improve in 2017 as the economy continues to grow and new developments come online to deepen the breadth of choice,” he added. The Asteco report also highlights how apartment rental rates in Amman recorded a marginal increase of one per cent, on average, over Q4 2016, with year-on-year growth standing at three per cent. “Abdoun and Der Ghabar areas saw the most significant increase of 6% due to the high level of demand for good quality units,” said Stevens. A three-bedroomed apartment in Abdoun is available for JD19,250 and JD17,750 in 4th Circle whilst the most affordable options are found in Al Rabiah for JD10,750. Those seeking a smaller space can rent a one-bedroom apartment in Sweifieh for JD4,250 or JD5,250 in Der Ghabar. The office market saw limited activity over the last quarter and rental rates declined by two per cent, on average. Areas such as Wadi Saqra and Shemeisani saw the biggest decline of 7 per cent and 3 per cent, respectively, as landlords reduced rental rates to attract tenants and improve occupancy levels