'Expatriate buyers boosting demand for apartments'

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Zuhair Omar, president of the Housing Investors Society, told The Jordan Times Monday that the majority of Jordanian expatriates, particularly those who work in the Gulf region and who are expected to leave the Kingdom after Eid Al Fitr for the countries where they work, choose to buy housing units before leaving.

"We are very optimistic that the performance of the real estate sector will be much better than last year," Omari said, explaining that incentives the government has introduced have had a positive impact in stimulating the sector.

The incentives include exempting the first 150 square metres (sq.m.) of apartments sized 300sq.m. or less from registration fees instead of the first 120sq.m., and reducing registration fees and taxes on properties from 10 per cent to 5 per cent.

Omari, who predicted a rebound in property prices next year, explained that since prices have remained stable, prospective buyers waiting for prices to drop further decided to act after the incentives were issued.

"I own a house in Irbid but I thought that buying an apartment in the capital is an investment at this time as prices are acceptable and the exemptions are tempting," the 33-year-old banker said.

Iyad Al Ali, a Jordanian accountant working in Saudi Arabia, said he was not planning to purchase a housing unit but changed his mind after several colleagues of his bought apartments.

"The majority of my Jordanian friends in Saudi Arabia purchased residential apartments back home," he noted.

"I remember two years ago when apartments were a bit cheaper but much easier to find. This year things are different due to demand from Jordanians abroad," said Farhan, who plans to take out a bank loan to buy his apartment, adding that property prices are still somewhat high in Amman.

Asked whether local banks are still imposing strict lending measures, Omari said that banks in Jordan are convinced that mortgage loans are safe because Jordanians are committed to paying off their debts.

"There is even competition among banks in terms of interest rates and maturity periods," the housing investor said, pointing out that the sector recovered after banks eased conditions on loans.

According to the Department of Land and Survey (DLS), the number of residential apartments sold between January and August of this year went up by 14 per cent to 14,109 units from 12,435 apartments during the same period of 2009.

Real estate trading during the first eight months of 2010 rose by 26 per cent to JD3.5 billion from JD2.7 billion during the same period of 2009, according to the figures released on Monday.

The DLS report showed that despite the increase in trading, DLS revenues in the January-August period were down by 7 per cent, to JD162.3 million, compared with JD174.3 million during the same period of the last year.

Officials attribute the drop to the exemptions from registration fees granted last May to buyers when purchasing residential apartments.

The government decided on May 20 of last year to extend the exemption from registration fees on the first 120sq.m. of apartments sized 150sq.m. or less to apartments sized 300sq.m. or less.

Last month, it decided to exempt the first 150sq.m. (instead of 120) of apartments sized 300sq.m. or less from registration fees.

The government also decided to reduce registration fees and taxes on properties from 10 per cent to 5 per cent in a bid to stimulate the real estate sector.

The value of exemptions during the first eight months of this year reached JD58.9 million, according to the DLS.

By Omar Obeidat

© Jordan Times 2010