Improved home financing and developers securing bank finance has allowed Jordan's real estate market to record the first quarterly growth since the downturn in the economy, according to a new report from the region's leading property management company, Asteco.
The Jordan Report Q2 2010 found that sales prices in the country have increased between one and 3%, with rentals jumping up to 4%. Small and medium-sized properties were particularly popular with tenants seeking affordable prices.
'We have witnessed a marginal increase in transactional activity with sales of individual apartments improving. There has been strong demand for larger four bedroom units of around 400 square metres plus,' said Hussein Safadi, General Manager – Jordan, Asteco.
'Despite this improvement, overall demand continues to be weak as potential investors are taking a cautious approach, however, prices have seen marginal increases. The cost of construction continues to remain high and subsequently the real estate market has yet to see any strong price movements.'
Abdoun and Um-Othainah continue to be the most expensive areas for apartments sales, commanding JOD1,000 per square metre, ($1,400) with 4th Circle close behind at JOD900 per square metre – all rising 3% on the first quarter this year.
The rental market has also followed suit, with prices at worst remaining stagnant but rising in many areas over the past three months. Abdoun continues to outshine other areas with an average price of JOD6,667 per annum – a 3% increase – but the largest percentage rise in the second quarter was witnessed in 4th Circle, where rents jumped 4% to average JOD3,192 per annum.
"The Jordan real estate market has begun to show signs of activity in prominent locations as landlords are offering better value for money," said Elaine Jones, CEO, Asteco Property Management.
In the Jordanian office market, a different scene is unfolding; Rents have continued to fall but sales rates have stabilised over the past three months.
Offices in Um-Othainah and Mecca Street performed best across the board with no changes in rent or sales prices in stark comparison to other areas, which all saw rental falls of between one and 3%.
But while space remains in plentiful supply, a number of companies are looking to build their own headquarters to reduce costs, especially locally-owned firms that already own land. Traditional hotspots have retained their appeal even if they have seen a price alteration of late.
"Mecca Street and Wadi Saqra Street remain the most sought after locations with landlords offering good quality developments. However, leasing rates have been stagnant in Mecca Street and a 2% decrease in Wadi Saqra Street indicates strong competition between landlords," added Safadi.
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