AMMAN — Housing market stakeholders on Monday said that the drop in apartment prices is a consequence of the “prolonged” economic impact of COVID-19 and the rise in global prices of freight and raw materials.
اضافة اعلان
According to latest figures from the
Central Bank of Jordan (CBJ), prices of apartments have dropped by 3.2 per cent in the third quarter of 2021 compared to the same period of last year.
Former president of the
Jordan Housing Developers Association (JDHA) Zuheir Omari said that purchasing power has severely plummeted due to the negative impacts of the pandemic on consumers, which led to low demand for apartments.
“This recession represents a drop in demand and also in supply. In other words, the whole sector has shrunk because of the low demand which led to a smaller number of newly-built apartments compared to previous years,” Omari told
Jordan News.
Over the last three years, investors built fewer apartments, Omari said, adding that in 2014, 45,000 new apartments were built, meanwhile in the last three years, the number of new apartment built each year have dropped to 20,000.
He said that Jordan needs up 50,000 apartments every year.
North of Amman sees the highest demand for apartments, Omari said, noting that most housing units are sold in this area due to their closeness to city workers’ home towns. Most employees working in the capital hail from Irbid, Zarqa, Jerash and Ajloun, and go home over the weekend.
He called on the government to develop infrastructure in new areas such as the south east of Amman to attract investors to build housing units there. Omari said this will contribute to the growth of this “ailing” sector.
For investor Mahmoud Saudi, the drop in prices is not representative of the general situation, and he expects prices to rise again due to the tremendous hike in costs resulting from the rise in global shipping prices.
“I think this drop in prices came from old apartments that were built at lower cost or apartments that were sold for urgent reasons other than trade,” Saudi said.
He said that another reason for an increase in prices of apartments is the high price of land, adding that prices of land vary widely between areas that are very close to each other.
Saudi said that in west Amman land prices vary from JD300 to JD30 per square meter, which means the government should develop new areas to reduce concentration in certain areas. He said the total inhabited area in the Kingdom amounts to just nine percent of the country’s land area.
The number of cases filed against tenants who fail to pay their rent has remarkably increased in the last two years, said Akram Abdulkareem, a lawyer.
“Tenants have exploited the COVID-19 situation to stop paying,” the lawyer said, adding that landlords currently can only get their apartments back but without the unpaid rent money.
“Currently, most of the cases I work on are related to eviction of tenants and most landlords say they want their houses back and will not rent them out again,” Abulkareem said.
Last week, East Amman Magistrates Court issued a ruling prohibiting the claim of unpaid rents during lockdown.
Figures from the Amman Stock Exchange show that there is an increase in real estate loans, including loans to buy or build apartments.
According to those figures, total real estate loans in 2018, 2019, and 2020 reached JD3.92 billion, JD3.95 billion, and JD3.99 respectively, while in first half of 2021 alone, real estate loans topped JD4,18 billion.
These figures do not accurately reflect the size of trade as they only represent real estate bought through bank loans and not those bought in cash.
According to experts, the housing sector makes up six percent of GDP at JD7 billion.
There are some 4, 000 registered housing companies in Jordan, but less than 1, 500 are actually operating, according to Omari.
The sector directly or indirectly provides employment to 100, 000 people in the Kingdom.
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