By Omar Obeidat
AMMAN –– Land sales during the first half of this year declined by over 50 per cent to stand at 30,403 transactions, compared with 65,385 in the same period of 2008.
According to Department of Lands and Survey (DLS) figures, sales of residential apartments also dropped by 28 per cent, with 8,006 units sold in the first six months of 2009 compared with 11,190 apartments sold in the same period of last year.
The DLS figures showed that the department’s revenues during the first six months of this year stood at JD125 million, compared with JD172 million for the same period of last year.
The drop in apartment sales was accompanied by a slowdown in housing construction, which also went down by around 50 per cent due to a shortage of liquidity among developers, President of the Housing Investors Society Zuhair Omari said.
“Housing companies are reluctant to carry out further projects because both the companies and buyers suffer financial difficulties due to banks’ conservative lending measures,” he noted.
According to the Central Bank of Jordan’s July report, credit facilities to the construction sector increased by JD134 million compared to the same period of last year, while credit to individuals declined by JD134 million.
However, Omari described the current sales figures in the sector as “relatively positive” because it was expected that the drop in apartment transactions would be sharper.
Omari pointed out the government’s decision to exempt more residential apartments from registration fees, saying the step helped the sector recover and increased apartment sales.
Late May, the Cabinet decided to widen the exemption on the first 120 square metres from apartments sized 150 sq.m. or less to apartments sized 300 sq.m. or less. The new exemption decision will only be valid until the end of this year.
Despite the government decision, the DLS figures indicated that demand for apartments sized 150 sq.m. or under is still higher than for larger units, with 5,252 smaller apartments sold during the first six months of this year, compared with 2,754 apartments sized over 150 sq.m.
Meanwhile, Omari called on the government to prepare a stimulus package to address the real estate market slowdown, and to urge banks to increase housing loans to ease the credit crunch.
He told The Jordan Times on Wednesday that the government bailout plan discussed early this year by the Lower House to support 30 housing companies with JD200 million has not been implemented.
The Lower House Finance and Economic Committee’s rapporteur, Yousef Qurneh, said that the bailout was prepared to help troubled economic sectors in the Kingdom, but was cancelled due to the increasing deficit in the state budget.
Qurneh said, however, that despite the financial deficit and the economic situation, a stimulus package is still needed to help the housing sector recover.
