Jordanians’ strong appetite for real estate back, statistics show

Buildings amman
(Photo: Saher Qadara/ Jordan News)
AMMAN — The total area of licensed real estate in the Kingdom saw a 92.1-percent rise during the first five months of this year, compared to the same period of 2020, according to statistics by the Jordan Engineering Association (JEA). اضافة اعلان

These are the approved blueprints for licensed real estate by the syndicate, not the government, explained Abdullah Ghosheh, head of the engineering offices committee at the JEA in an interview with Jordan News. The application for licensing starts with this procedure, he said.
“From 2016 till 2020 there has been a consistent drop in (licensed areas) averaging about 20-30 percent a year. It appears that now we are going back to the normal range in real estate activity in Jordan, where around 4.5 million square meters have been licensed so far.”

A breakdown of these figures shows that about 75 of the approved building projects are in the residential sector. This is due to organic demand.

“There is an organic demand for 60 thousand units a year with population growth. Plus, a good portion of expats need real estate; due to the regional geopolitical situation, Jordan is among the safer areas in the region,” Ghosheh explained.

Another factor that has affected this growth is the perception that real estate is a safe sector for investment. Ghosheh explained that while several industries suffered due to COVID-19, this sector managed to remain stable.

“Real estate is a safe sector, as there is a natural need for it, and so I expect that it will keep growing,” he said. “But at the same time, so that citizens and the country benefit from this, we need to simplify the licensing processes.”

Experts agree that the real estate and construction licensing processes in Jordan are lengthy and inefficient. This acts as an obstacle to the initiation of projects. “We need a reevaluation of government strategies because there are people who want to invest, and it is important to pay attention to them,” said Ghosheh.

For this reason, among others, Ismail Saudi, a real estate advisor and member of Jordan Economic Forum, believes that other indicators in the sector need to be considered.

“The licensed areas for building are an important indicator, but a better economic indication is to look at the actual exchanges that take place in the real estate sector,” he said in an interview with Jordan News.

The value of real estate activity in Jordan reached JD7.8 billion in 2014, the highest figure recorded in the country’s history, explained Saudi. Given population growth rates and the availability of wide-geographical areas, this number was expected to increase.

“Yet, in 2019 the figure was JD4.6 billion, this is almost 60 percent less than what it was before,” the expert said. “As for 2020, we recorded JD3.4 billion in real estate activity.”

He believes that the issue goes back to several factors. This includes zoning, areas in the country that are not officially planned by municipal authorities in a manner that allows investors to construct residential areas with easy access to Amman. Others include higher-than-average bank interests on home loans, and high taxation rates imposed on real estate.

“We are looking into new systems and regulations to regulate real estate planning in Jordan for companies and individuals,” said Saudi. “Owning property is considered a sign of wealth; it is the base of a nation, an essential requirement that we have not been able to satisfy.”

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