Real estate incentives prompt expats to start a buying surge in Jordan

by Ray Clancy on September 13, 2010

Expats are fuelling a surge in demand for apartments in Jordan helped along by government incentives to buy, it is claimed.

According to Zuhair Omar, president of the Housing Investors Society, the majority of Jordanian expats, particularly those who work in the Gulf region, and who have been home for the Eid holidays are buying properties as an investment.

He believes that moves by the government to stimulate the country’s real estate market have proved popular. They include exempting the first 150 square metres of apartments of 300 square meters or less from registration fees instead of the first 120 square meters and reducing registration fees and taxes on properties from 10% to 5%.

‘These decisions had a positive impact on housing companies and buyers alike. They encouraged people to purchase as the exemptions can save them thousands of dinars,’ said Mahmoud Soudi, a director of a real estate company.

Figures from the Department of Land and Survey (DLS) show that the number of residential apartments sold between January and August of this year went up by 14% 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% to JD3.5 billion from JD2.7 billion during the same period of 2009, according to the figures.

Omar, who is predicting 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 introduced.

Mahmoud Hassan, a Jordanian expatriate who works for a bank in Abu Dhabi, told The Jordan Times that he bought an apartment this year because he found prices reasonable.

’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 said.

Asked whether local banks are still imposing strict lending measures, Omar 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,’ he added.

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