| 29 Dec 2009 |
|
Access to easy credit key to real estate recovery - experts
- Text size
AMMAN -- Experts in the real estate sector believe that the market can recover next year if access to credit and conditions on mortgage finance programmes are eased.
Zuhair Omari, president of the Housing Investors Society, described the property market nowadays as "ailing" as a result of the credit crunch it has experienced in 2009 due to the strict measures banks imposed on loans, adding that the sector will bounce back if banks change their attitude.
After local banks tightened their conditions on credit facilities, the number of troubled housing companies increased, and banks should reschedule the loans provided to troubled developers, Omari said, noting that only a small portion of companies were able to deal with the credit stagnation.
"We urged the government to exempt housing companies from income tax for five years and we called for partnerships with investment funds, such as the Social Security CorporationSocial Security Corporation
and the Jordan Engineers Association, to help the sector recover," he added.
"Despite that, the sector in 2009 went through a severe slowdown," he said, adding that the real estate market was the second hardest hit by the global downturn after the financial market.
Rami Adwan, deputy chief executive officer for marketing and sales at Taameer Jordan Holdings, expected growth in the sector to start in mid-2010.
Describing 2009 as a "catastrophic year", he said that local banks had strict lending measures even before the global financial crisis, which forced banks to further tighten conditions on credit facilities.
Defending the decisions made by financial institutions, banking expert Mefleh Aqel said bank-lending policies are drawn up with risk taken into consideration as a major criterion.
Despite the drop in construction material prices and the government's decision to widen the exemption from registration fees on the first 120 square metres of apartments sized 150 square metres or less, to apartments sized 300 square metres or less, these developments, according to Adwan, were not enough to ensure revitalisation.
But Omari said the government's decision to extend the fee exemption, which ends on December 31, was good news for the sector, particularly over the past few months as buyers sought to benefit from the exemption before it expires.
According to Edraj Real Estate Company's research centre, signs of recovery have already started to show in the sector, and figures from the second half of this year gave confidence to the market.
Demand on residential apartments and commercial offices has increased recently, reflecting optimism that recovery is likely in the sector next year, according to Edraj.
"We need specialised mortgage finance corporations that provide loans with longer maturity periods and cheaper interest rates," Adwan said, indicating that the majority of monthly instalments to housing loans reach an average of JD400, which is unaffordable by most Jordanians.
Aqel agreed that mortgage finance firms are needed in Jordan to facilitate loans with longer repayment periods.
And Omari said that the monthly instalment should not exceed one-third of the beneficiary's income, with maturity periods on loans of up to 30 years.
By Omar Obeidat
© Jordan Times 2009
Zawya is a distributor (and not a publisher) of content supplied by third parties and subscribers. Any opinions, advice, statements, services, offers, or other information or content expressed or made available by those third parties, including information providers, subscribers or other users of the Service, are those of the respective author(s) or distributor(s) and not of the Company. The Company neither endorses nor is responsible for the accuracy or reliability of any opinion, advice or statement made on the Service by anyone other than authorized Service employee spokespersons while acting in their official capacities. The Company is not responsible for any infringement of intellectual property rights or breach of any applicable law or regulation, including regulation in relation to financial services or the distribution of financial products, defamation, data protection, telecommunications (including regulations relating to excessive use, spamming or other abusive activities) or obscene, offensive or illegal content). Under no circumstances will the Company be liable for any loss or damage caused by a member's reliance on information obtained through the Service. It is the responsibility of member to evaluate the accuracy, completeness or usefulness of any information, opinion, advice or other content available through the Service. Please seek the advice of professionals, as appropriate, regarding the evaluation of any specific information, opinion, advice or other content.
Read the full Member Agreement
http://www.zawya.com/legal/NewsLetter.cfm?name=disclaimer
Post a Comment
1.1 Contain any material which is libelous or defamatory of any person, is obscene, offensive, hateful or inflammatory or causes damage to the reputation of any person or organisation.
1.2 Promote sexually explicit material, violence, discrimination based on race, sex, religion, nationality, disability, sexual orientation or age or any illegal activity.
1.3 Be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence.
1.4 Be threatening, abuse or invade another's privacy, or cause annoyance, inconvenience or needless anxiety.
1.5 Be used to impersonate any person, to misrepresent your identity or affiliation with any person, or be likely to deceive any person.
1.6 Give the impression that they represent Zawya.
1.7 Advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse.