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World Bank: Jordan’s economy to post 2.3% growth in 2017

 

Jordanian property market shows signs of recovery, stability despite economic pressures

 

Jordanian properties retain market value thanks to resilience of banking sector and promising real estate opportunities

Jordan’s real estate market has shown significant positive signs over the past period on the back of continued demand by Jordanians and residents coming from neighbouring countries, which has ultimately contributed to keeping the prevailing rates unchanged as a direct result of the tremendous population growth witnessed by the Kingdom over the past ten years.

In its weekly real estate report, Al Mazaya Holding said Jordan’s real estate market provides a key to many of the political problems witnessed in neighbouring countries. Latest data indicates that although the market has not fully picked up and recovered from the price fall across the region, it still retains its value, competitive edge and an investment-conducive environment.

The report mentioned that the recent measures taken by the Jordanian government play an important role in rejuvenating the real estate sector. These include increasing tax exemptions to enable wider segments of society to own appropriate housing units that match their purchasing power. Additionally, positive legislation reflects conveniently on the market and economy, which regulates the freehold investment relations with non-Jordanians in a flexible way that would not impinge on the country’s demographics, and would not allow hot money to be invested in primary sectors which don’t tolerate random speculations or short-term, drastic trends for correction.

The report noted that the Jordanian real estate market has gone through contradicting developments since the beginning of the year, with property sales having reportedly declined by up to 6 per cent during the first quarter of the year during which real estate transactions declined compared to the same period last year, going down to JOD 1.5 billion, with sales falling by 10 per cent during the same period. Apartment sales retreated by 11 per cent while land sales decreased by around 10 per cent on an annual basis.

In the meantime, real estate transactions dropped to JOD 2.7 billion until May 2017 from JOD 2.5 billion during the same period last year – 7 per cent down. With tax exemptions for apartments falling as well by 11 per cent until April, the capital Amman recorded 74 per cent of the total volume of transactions.

The report highlighted the strengths of the Jordanian real estate market which earned the sector an important ranking as one of the most important emerging markets in terms of market value, forces of demand and supply and investment competitiveness.

The Jordan’s property market has seen a jumbo leap in areas of high-rise building and urban development, coupled with a rising number of skyscrapers that were not common in the market before. In the meantime, a couple of housing investment developments have been launched across the Kingdom along with a large number of tourist projects aimed to enliven the tourism sector and provide diverse hospitality services.

The number of real estate investors has been significantly increasing over the past few years as a direct result of the state of political and economic instability witnessed across the Middle East.

The report noted that the stability boasted by Jordan’s market has contributed to propelling demand among Jordanians in the first place, increasing capital inflows coming in from neighbouring countries to launch mega property developments.

The report stressed that the Jordanian market has good levels of liquidity, with the magnitude of the kingdom’s banking sector playing a significant role in advancing real estate investments.

The report added that real estate and non-real estate investments in Jordan are directly affected by Gulf economies where a large number of Jordanians are working. The fact that Gulf nations are now in the process of replacing foreign workforce with national manpower is likely to reflect positively on the Jordanian market if proper measures have been taken to ideally benefit a large number of Jordanian expats coming back from Gulf countries.

Concluding, the report said Jordan’s real estate market abounds in promising investment opportunities and it is still considered among the major economic sectors in the country despite all besetting challenges. The report cited recent World Bank report which highlighted the country’s ability to post a growth rate of 2.3 per cent for the current year that will reach 2.6 per cent by 2018. Several United States companies reportedly seeking to utilise the investment opportunities generated by the economy at the current period, which means launching long-term economic and trade partnerships with the US that are likely to reflect favourably on the economic diversification plans, and ultimately ensure further stability and growth.