Recovery of housing sector hinges on gov’t’s support — stakeholders

AMMAN — Jordan's housing sector has been deteriorating since 2014, with trade value dropping by 30 per cent in the last three years, a sector leader has said.

According to studies, Jordanians need 60,000 housing units annually, but so far in 2017, only 32,000 have been sold, according to Jordan Housing Developers Association (JHDA).

The number of empty apartments amounts to “thousands” accumulating over the past years, JHDA President Zuheir Omari told The Jordan Times on Wednesday. There are no official statistics to indicate the exact figure, he noted.

The soaring prices of land plots, construction costs and registration fees are the reasons behind the recession, Omari said.

The president called on the government to reduce the ownership transfer fees from 9 per cent, which is “the highest in the region”, down to 5 per cent, or sustaining the exemption on the first 150sqm from registration fees.

According to a previous government decision, the exemptions are scheduled to be cancelled today (November 30), said Omari.

The sector leader called on the government to even extend the exemption to include all sizes to "rescue" the sector, underlining the very low demand on empty units that exceed 180sqm.

“Many housing firms are out of business because of the low demand. Failing to support the sector will have negative consequences on the national economy,” he said.

He noted that the sector feeds at least 40 other industries that are linked to construction, while creating thousands of direct and indirect job opportunities. 

The regulations have to consider the cost, price of land and the purchasing power of buyers, said Omari.

Most Jordanians seek to buy apartments with an area of 120sqm or less, while around 30 per cent buy 150sqm apartments obviously for price matters, according to JHDA figures.

The syndicate serves as an umbrella for more than 3,300 real-estate member companies, and each, under the law, must be 51 per cent owned by a Jordanian. 

For foreign buyers of housing units, the majority are Iraqis, British, Saudi Arabians and Syrians.

“The turnout of non-Jordanian buyers has not changed over the past few years, making up 10 per cent of the total number of buyers”, said Omari 

Hesham Al Ali, an executive at a construction company, said business is down by around 20 per cent this year when compared to last year.

“We used to rely a lot on selling apartments to expatriates and sales were usually high in Ramadan and the period after that as many of them came for visiting families,” Al Ali told The Jordan Times on Wednesday.

“Prices of apartments increased slightly due to an increase in prices of steel and cement and other costs and maybe this is another reason why sales are lower. I believe extending the exemptions on apartments is crucial to support the sector and eventually those who work in this field. With no exemptions, buyers might be reluctant,” he added

Economic expert Wajdi Makhamreh said the main reason behind the slow business in the real estate sector is the general geo-political situation that the region has been going through, especially during the past four years.

He added that all of the economic sectors have faced difficulties since the beginning of the regional turmoil and many real estate investors were afraid to invest, citing a state of uncertainty.

Agreeing with Omari, the pundit said the government has to support the sector by offering incentives to companies, simplifying the regulations, and reducing taxes.

He stressed the importance of helping ailing companies and giving them grace periods to rectify their situations.