Aqaba, Jordan
צילום: איי פי
Jordan real estate market seeks gov't aid
Sources in Hashemite kingdom say real estate projects worth $3 billion called off so far, others postponed; eight companies report losses in 2008
The Jordanian real estate market is suffering from a sharp decline in demands, as part of the implications of the global financial crisis.
According to sources in the Hashemite kingdom, real estate projects worth $3 billion have been called off and the implementation of other projects has been postponed. In addition, eight real estate companies in the Jordanian market reported losses in 2008.
Sources in the Jordanian market note that the contractors decided to halt construction projects with the hopes that the Jordanian government would launch an aid program for the sector.
According to recent reports, projects of apartment buildings and new suburbs in the different cities belonging to local and foreign investors have been called off.
Zuhair al-Amri, chairman of the Real Estate Investments Company, stated that the decline in the Jordanian real estate market began in 2007, but that the situation worsened in light of the global financial crisis in 2008.
According to al-Amri, the Jordanian market's needs reach some 40,000 housing units a year. Last year, however, only some 20,000 housing units were built, one of the reasons for this being the drop in the loans for housing on the part of the local banks.
Al-Amri stressed that the number of new housing units was reduced despite the drop in the prices of construction elements. He warned that the crisis in the real estate industry would lead to negative ramifications on satellite industries as well.
Al-Amri believes that the fact the banks are refraining from giving loans for the purpose of purchasing apartments has been creating the feeling among consumers that the real estate industry is unsafe and is on the verge of collapsing. He warned that should this trend continue, the entire Jordanian economy will suffer heavily.
Doron Peskin is head of research at Info-Prod Research (Middle East) Ltd
