AMMAN — By 2030, Jordan is expected
to host around 1.7 and 3.5 million new residents, on top of its over 10 million
population. Nevertheless, more than 20 percent of the existing housing supply
is vacant, according to the
World Bank.
اضافة اعلان
Construction costs in Jordan,
including labor and materials, account for 20 to 40 percent of the cost of a
housing unit, while taxes and fees on housing projects can “reach up to 30
percent of the total cost of the project,” the World Bank said in a report
published in 2018.
“The housing sector in Jordan is
heavily taxed,” the report noted.
The same report dissecting Jordan’s
housing sector, said the “unexpected and rapid population growth has put
incremental pressure on the housing sector.” Over the past 15 years, Jordan saw
an influx of refugees and migrant workers. As a result, its population grew by
an average of 6 percent annually, “exceeding population projections by almost
30 percent.”
To maximize tax revenue, the
Jordanian government taxes shipping costs, in addition to taxes imposed on
imported material. In an interview with
Jordan News, the head of Jordan’s
Housing Investors Association, Kamal Awamleh, agreed that soaring shipping
costs have proven detrimental to the real estate market, as materials have
become more expensive.
Awamleh also accredited rising
construction costs to the lack of “market oversight” — a task that the Ministry
of Industry Trade and Supply is responsible for.
The rise in construction costs is further
exacerbated by the market’s inability to compete, according to Awamleh.
Low competition, in any market, is
bound to keep prices high. Cement, for instance, in light of the absence of
competition, is up by more than JD10, he explained.
This vastly impacts the cost of
constructing a residential building in Amman, which requires 500 tons of cement
on average. As cement prices shot up, the construction of a single building now
costs JD7,500 to JD10,000 more than it did in 2020, according to the sector
representative.
Competition is especially low “among
steel and cement factories,” Awamleh noted.
The Competition Directorate at the
Ministry of Industry Trade and Supply is falling short in maintaining healthy
competition, according to Awamleh. The lack of competition, often supplemented
by merchants’ attempts at maximizing profits, directly contributes to the
housing crisis that, as of now, looms in the distance, says Awamleh.
Jordan only has a few governmental
programs that “support either the development of affordable units or to provide
subsidies to the poor households in need of housing,” according to the World
Bank.
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