Apartment rents and sales prices rise in selected areas due to limited supply and robust demand - overall market conditions are stable says Q2 2012 Asteco report
Apartment rents in Jordan were mostly unchanged in the second quarter of 2012, compared with the previous quarter, according to the Q2 2012 report by leading UAE headquartered property management company Asteco.
Marginal increases of 2% and 3% respectively were seen in the Abdoun and Der Ghabar areas for three-bedroom apartments due to strong demand. Rents elsewhere were stable with the exception of the 4th Circle which experienced a 1% increase in rental rates for three-bedroom apartments due to limited supply.
“Developers are showing a preference for Der Ghabar due to its advantageous location and new roads allowing easier access to the airport and other main areas,” said Elaine Jones, CEO, Asteco.
“Another attraction for developers is the land elevation. Currently municipality regulations permit developers to build a maximum of four floors in residential buildings. However with the elevated sites in Der Ghabar, developers can also build three further floors below street level to accommodate more units,” added Jones.
The average rental rate for a three-bedroom apartment in Abdoun was up to JOD15,750, while rates for similar properties in Der Ghaber and 4th Circle were up to JOD13,250 and JOD16,250 respectively.
Jordan’s sales market saw little change from the first three months of 2012 with stable prices recorded in Abdoun, Sweifieh, Um Othainah and Al-Rabiah, ranging from JOD825 per square metre in Al-Rabiah to JOD1,075 per square metre in Abdoun. However, apartment sales prices rose by 8% to JOD1,025 per square metre in Der Ghabar and 2% to JOD1,050 per square metre in 4th Circle, due to strong demand and limited availability.
“Jordanian families prefer many of these areas due to the proximity of retail, entertainment and leisure facilities,” said Jones.
Leasing rates for offices were also unchanged compared to the previous quarter, with demand predominantly coming from local SMEs who prefer to rent office space. Um-Othainah remained the most popular area with rents steady at JOD118 per square metre.
The office sales market also reported stable rates in Q2. A number of financial institutions have started to build their own headquarters, notably on Zahran Street. However this as yet has had no effect on overall sales prices and the Um-Othainah district once again commanded the highest prices in Amman at JOD1,000 per square metre, with better quality buildings in the Wadi Saqrah and Sweifieh stable at JOD925 and JOD975 per square metre respectively.