Jordan real estate market stable after government measures
* Introduction of tax incentives came to rescue of realty market
* Prices have remained stable throughout the year and over the quarter
* Apartment rental rates in Amman recorded a marginal increase
When faced with stalling growth on the back of oversupply, Jordan’s government came into the rescue of the country’s real estate market by introducing tax incentives.
As developers also took measures to alleviate the oversupply the market witnessed in 2016, prices have remained stable throughout the year and over the quarter, according to the latest report from consultancy Asteco.
“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,” says John Stevens, Managing Director, Asteco.
Feeding the trend
“The new initiative, which waives the registration fee for the first 150 square metres of any home smaller than 180 square metres is feeding the trend for buyers looking for smaller units that are competitively priced – especially in the densely-populated capital city, Amman,” adds Stevens.
Transaction levels have, however, declined despite the support measures.
“Although the market is going through a sluggish phase and transaction levels have reduced, sales are still taking place,” said 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.”
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, says the report.
Sales prices for apartments remained stable across the board during 2016, standing at an average of JOD1,375 (AED7,128) per square metre for units in Abdoun and 4th Circle, JOD1,250 in Um-Othainah, JOD1,200 in Der Ghabar, JOD1,188 in Sweifieh and JOD1,100 in Al-Rabiah.
Rents go up
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 3 per cent.
“Abdoun and Der Ghabar areas saw the most significant increase of 6 per cent due to the high level of demand for good quality units,” said Stevens.
A three-bedroom apartment in Abdoun is available for JOD19,250 and JOD17,750 in 4th Circle while the most affordable options are found in Al-Rabiah for JOD10,750.
Those seeking a smaller space can rent a one-bedroom apartment in Sweifieh for JOD4,250 or JOD5,250 in Der Ghabar.
Office rentals drop
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 seven per cent and three per cent, respectively, as landlords reduced rental rates to attract tenants and improve occupancy levels.