Jordan Report Q1 2010
Jordan Report Q1 2010
Jordan Report Q1 2010
Property Market Summary
Highlights
Generally, the Jordanian real estate market continues to decline at a minimal rate, with some sectors of the market showing signs of rental rates and sales prices stabilising.
The office market has experienced the largest decreases overall. However, much effort is being focused on initiatives to stimulate the economy.
The largest decrease per bedroom type was recorded in Sharjah with one-bedroom apartments contracting by 9%.
Sales activity has been absent, to some extent, over the last three months for all property types. However, new mortgage terms recently introduced by banks are expected to aid the real estate market to a degree.
Real Estate Monitor
"2010 will be a ground-breaking year for the Abu-Dhabi real estate market with the first phases of 'Investment Area' stock being delivered. This new 'freehold' supply, along with many sizable build to lease projects on and off the main island, will bring a significant quantity of new supply, with a total close to 20,000 new homes by the end of the year. This will being movement to the market and, for the first time in Abu Dhabi, some truly high-end residential developments."
Elaine Jones
CEO, Asteco Property Managment
Jordan Residential Continues Minimal Price Movement
The leasing market has seen more activity than the sales market, with demand for smaller-sized one- to two-bedroom properties in Abdoun, Sweifieh and Der Ghabar - particularly from non- Jordanians working in Amman.
The number of overseas Jordanians returning to Jordan from countries in the GCC has not impacted the rental market as expected.
Property sales have remained relatively flat in the last few months, with limited transaction activity. Many of the high-rise tower projects under design have been put on hold until confidence in the market returns and the cost of raw materials is reduced. Interest remains healthy for smaller units with some of the major banks announcing improved mortgage facilities.
Jordan Office Decrease Slows
The rental market continues to decrease, albeit at a slower rate than in the previous quarter. Mecca Street remains one of the most important areas in terms of the office rental market due to the superior grade of buildings available, location and reduced rents
Rental rates are expected to continue to fall slightly due to businesses slowing down, companies downsizing and relocating to smaller offices. Landlords need to be competitive not by simply reducing rental levels, but by offering value added services and incentives such as rent-free periods and properly managed buildings in order to ensure longevity of tenants.
The number of office properties for sale is limited in Jordan, with only a handful of properties available in areas such as Jordan Gate Tower, Emaar Tower and Al Abdali area. Activity in the commercial market has, therefore, been seen primarily in the leasing market. Some of the larger Jordanian companies are interested in purchasing buildings to house their head office; however, with the uncertainty in the market, plans for expansion and the possession of assets have been put on the back-burner until market sentiment changes.
Those tower projects that are for sale are not attracting corporations, particularly banking institutions, as they tend to retain their own land to build and occupy as their corporate head offices. Low-rise properties in Al Abdali area are expected to launch this year and are likely to offer attractive pricing levels to stimulate opportunities for investors.
Progress is being made with the Development Zones Commission recently sealing a number of agreements with Arab and foreign investors who expressed interest in investing in Jordan's development zones. In addition, efforts are being made to promote the country's six development areas.
Asteco Property Management LLC
With over 25 years of Middle East experience, Asteco's Professional Services team brings together a group of the Gulf's leading real estate experts.
Asteco's network of offices in Abu Dhabi, Al Ain, Dubai, Northern Emirates, Qatar, Bahrain and Jordan not only provides a deep understanding of the local markets but also enables us to undertake large instructions where we can quickly apply resources to meet the clients requirements.
Our breadth of experience across all the main property sectors is underpinned by our sales, leasing and investment teams transacting in the market and a wealth of research that supports our decision making.
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