Jordan’s property sector remains stable, with minor price increases in residential sales amid the political unrest that has slowed the property market, said a report.
During the first three months of 2011, demand for small-and medium-sized apartments continued, partly due to restricted land supply in prime locations and reduced housing budgets, added the latest First Quarter Jordan report from Asteco, a major real estate services firm. A move in favour of small- and mid-sized apartments instead of larger units or villas has also had an impact in this regard, it said. “The Jordanian government moved swiftly in adopting policy changes to protect various areas of the economy, including real estate, as political unrest impacted some countries of the Middle East,” said Elaine Jones, CEO, Asteco Property Management. “As a result, of these changes, which included limitations on price increases and the waiving of transfer fees, Jordan’s property market has shown little sign of slowing.” The most movement was seen in areas east of the capital of Amman, with affordable housing for low-to middle-income earners showing reasonable activity in both sales and leasing transactions. Apartment sale prices in Jordan’s 4th Circle were down 1 per cent over the quarter, at JD950 ($1,338) per sq m, with Abdoun remaining the most expensive area, with an average selling price of JD1,050 per sq m. An issue also raised in the report was the end of the transfer fee-free period on property sales, which expired on March 31. At the start of April, the waiving of transfer fees for properties less than 150 sq m, and 5 per cent fee reduction on those between 150 and 300 sq m, came to an end.
The report highlighted the more pro-active approach being adopted by Jordanian banks, with some approaching developers directly to offer products and services aimed at attracting more buyers and stimulating market activity.
Another bank has also embarked upon a GCC road show to showcase attractive financial packages and mortgage programmes to overseas investors as part of the country’s new property developments. With new developments being delivered to the office market, oversupply issues have continued from the last quarter. Across the sector, office sales eased 5 per cent during the first three months, with rentals faring only marginally better, down 2 per cent.
The report found companies still favoured leasing commercial space, rather than buying to keep overheads as low as possible amid the economic uncertainty. Office rentals generated some new interest during the quarter, with a small number of organisations, including some local Jordanian companies along with European semi-government foundations, looking for large office units of between 500 and 1,000 sq m. With many taking considerable time before committing to tenancy contracts, intense competition has built-up between real estate companies looking to win the business, the report said.