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Housing developers pin hopes on dialogue as business suffers

By Mohammad Ghazal - Sep 20,2018 - Last updated at Sep 20,2018

AMMAN — Housing developers said Wednesday they would soon start discussions with authorities to amend the new building code, as trading in the real estate sector went down significantly in the first eight months of this year.

"We reached an understanding with the Ministry of Municipal Affairs to start dialogue with all stakeholders to amend the code, which we believe is the main reason for decline in trading," President of the Jordan Housing Developers Association Zuhair Omari told The Jordan Times yesterday. 

Trading in the sector reached JD3.516 billion in the January-August period, recording a decline of 13 per cent compared with the same period last year.

Meanwhile, the number of licences issued for new buildings dropped by 8.3 per cent during the first seven months of 2018, according to figures released this week by the Department of Statistics.

“The main reason for the decline is that buyers want small-sized apartments and we are not allowed to build small apartments,” he said.

Citing a study conducted by the World Bank and the Ministry of Public Works and Housing recently, he said the demand for apartments in Jordan is around 80,000 per year and an overwhelming majority of the demand is for apartments that are around 100 sq.m.

The code stipulates that residential units must be at least 110 sq.m. in B, C and D zones, and 130 sq.m. if the area is classified as A zone, a matter that would limit buyers’ options, the sector leader said.

Under the regulations, developers cannot build small apartments anymore, although the demand in the market is for apartments that are smaller than 120 sq.m., according to Omari.  

According to the association, 32 per cent of Jordanians who bought apartments in 2017 chose ones that were smaller than 120 sq.m.

Currently, the total value of unsold apartments that are more than 170 sq.m. exceeds JD1 billion in value.

“There is no demand on large-sized apartments at present,” the syndicate’s president said, noting the impact of that on national economy as the housing development sector contributes around 6 per cent to GDP.

“We are optimistic about the dialogue that will start soon and we hope the situation will change for the better,” he said.

The sector, which employs tens of thousands of Jordanians, has been witnessing a decline in demand since 2015.

There are 3,400 housing companies in Jordan registered with the union, according to the association. 

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Comments

A 10 to 30 sq.m is not the culprit for the declining sales. Anyone who can get financing for a 100 sq.m apartment will also qualify for a 110 sq.m apartment. The real reason is the high unemployment and low wages. Many have given up on being able to afford buying a home in Jordan and instead are focusing their efforts on leaving Jordan to find employment elsewhere.

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