Jordan real estate market to get government boost
Apartment rental rates in Amman recorded a marginal increase of 1%, on average, over Q4 2016, with year-on-year growth standing at 3%
Prospective buyers in Jordan are taking a cautious approach to investing by seeking out smaller units offering the best value for money, according to the latest report from leading real estate consultancy Asteco.
To motivate buyers, both the government and developers have put several incentives in place to alleviate the oversupply the market witnessed in 2016. In line with these efforts, prices have remained stable throughout the year and over the quarter, but resulted in a reduction in transaction levels, according to the Asteco Jordan Real Estate Q4 2016 report.
“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,” said John Stevens, managing director, Asteco.
“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,” added Stevens.
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 (AED6,480) in Um-Othainah, JOD1,200 (AED6,220) in Der Ghabar, JOD1,188 (AED6,158) in Sweifieh and JOD1,100 (AED5,702) in Al-Rabiah.
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% in 2017 and 4% by 2019 – a momentum that could provide a welcome boost for property sales.
One upcoming project in the spotlight is Al Abdalli, a mixed-use development in Amman that will comprise residential, office, retail and hotel components over a total built-up area of two million square metres.
“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 Asteco report also highlights how apartment rental rates in Amman recorded a marginal increase of 1%, on average, over Q4 2016, with year-on-year growth standing at 3%.
“Abdoun and Der Ghabar areas saw the most significant increase of 6% due to the high level of demand for good quality units,” said Stevens.
A three-bedroomed apartment in Abdoun is available for JOD19,250 (AED99,788) and JOD17,750 (AED92,012) in 4th Circle whilst the most affordable options are found in Al-Rabiah for JOD10,750 (AED55,726). Those seeking a smaller space can rent a one-bedroomed apartment in Sweifieh for JOD4,250 (AED22,031) or JOD5,250 (AED27,219) in Der Ghabar.
The office market saw limited activity over the last quarter and rental rates declined by 2%, on average. Areas such as Wadi Saqra and Shemeisani saw the biggest decline of 7% and 3%, respectively, as landlords reduced rental rates to attract tenants and improve occupancy levels.