Market in Depth

Jordan’s property prices stable, despite weak demand

May 30, 2016

Residential property prices in Jordan have remained largely stable throughout 2016 but property transactions have noticeably declined, according to UAE-based property management firm, Asteco

In Amman’s major districts:
  • In Abdoun, the capital city’s most affluent area, apartment prices rose by 2% y-o-y in 2016, to an average of JOD1,375 (US$1,938) per square metre (sq. m), according to Asteco.
  • In 4th Circle, the average apartment price increased 1% y-o-y to JOD1,325 (US$1,867) per sq. m. last year.
  • In Sweifieh, the average apartment price was unchanged in 2016 from a year earlier, at JOD1,188 (US$1,674) per sq. m.
  • In Um-Othainah, the average apartment was unchanged in 2016 from a year earlier, at JOD1,250 (US$1,762) per sq. m.
  • In Al-Rabiah, apartment prices were also stable at an average of JOD1,100 (US$1,550) per sq. m.
  • In Der Ghabar, the average apartment price was also unchanged at JOD1,200 (US$1,691) per sq. m.

Property demand remains weak. In Q1 2017, real estate transactions were down 6% from the same period last year, according to Jordan-based news agency Petra.

There were about 632 properties purchased by foreign investors in Q1 2017, far lower than the 954 transactions recorded in the same period last year. Apartment sales represented about 76% of the total transactions while the remaining 24% were for land sales.

Iraqis accounted for most investments, at JOD31.7 million (US$44.7 billion), followed by Saudis (JOD30.5 million or US$43 million), Lebanese (JOD5.7 million or US$8 million) and Syrians (JOD5.2 million or US$7.3 million).

To stimulate the housing market, the government has recently introduced tax saving measures.

“The new initiative, which waives the registration fee for the first 150 square metres of any home smaller than 180 square metres is feeding the trend for buyers looking for smaller units that are competitively-priced, especially in the densely-populated capital city, Amman,” said John Stevens of Asteco.

Property developers remain upbeat that the housing market will improve this year, as evidenced by the continued construction of some residential and mixed developments. One such is Al Abdalli, a mixed-use development in Amman with residential, office, retail, and hotel components over a total area of 2 million square metres.

Loans to the construction industry have been rising. In March 2017, the total amount of credit to construction surged 16% to JOD6.15 billion (US$8.66 billion) over the same period last year, according to the Central Bank of Jordan.

“It is hoped that the climate will improve in 2017 as the economy continues to grow and new developments come online to deepen the breadth of choice,” added Stevens.

The economy grew by 2.1% in 2016, the lowest growth in two decades, according to the IMF. The chaos in neighboring countries such as Syria is hurtingJordan’s exports, tourism, and overall economic performance. The economy is projected to expand by a modest 2.3% this year and by another 2.5% in 2018.

Foreigners are allowed to buy property in Jordan, provided Jordan and the buyer’s country of residence have a reciprocal relationship, and that the approval of the Cabinet (Council of Ministers) is obtained. Foreigners can only sell the property five years after acquisition. Most properties for rent and for sale can be found in Amman, Jordan’s capital city.

Analysis of Jordan Residential Property Market »

Rental Yields

Jordan: gross rental yields good at 6.5% to 9%

Property prices. Typically, it costs around US$1,850 per square metre to buy an apartment in Jordan’s capital Amman – less at the lower end, more for larger apartments, according to our sample (though this may not apply to the very smallest apartments).

Property rents. Rental rates in Amman are rather high, due no doubt to the large number of refugees who have poured in to the country. Smaller apartments yield significantly more than larger apartments.

Property returns. Gross rental yields on apartments in Amman are good.

Yields on villas are somewhat lower. We researched villas in previous years but this year were unable to gather data. The lower yields are because villas tend to cost substantially more on a per square metre basis, because of the land value.

Property buying costs.  Round trip transaction costs on the purchase of residential property in Jordan are moderate to high, especially in comparison with the rest of the Middle East. See our Jordan residential property Buying Guide and Residential property transaction costs in Jordan compared to the rest of the Middle East.

Read Rental Yields »

Taxes and Costs

Moderate to high taxes in Jordan

Rental Income: Rental income is considered business income and is subject to corporate income tax at a flat rate of 20%.

Capital Gains: Capital gains are generally not taxed in the country.

Inheritance: There are no inheritance taxes in Jordan.

Residents: Residents are taxed at progressive rates.

Read Taxes and Costs »

Buying Guide

Total transaction costs are moderate in Jordan

Roundtrip transaction costs are around 7.94% to 12.94%. Registration fee is levied at 3% to 8%, the applicable rate varies depending on the status of the buyer and property size. Both parties equally share the real estate agent’s fee of 4%, which is subject to a 16% Goods and Services Tax (GST).

Read Buying Guide »

Landlord and Tenant

Rents are paid a year in advance in Jordan

Jordan luxury residential housesRent: Since most rents are paid a year in advance, deposits are not required.

Tenant Security: The typical lease contract lasts a year, with an option to renew. Although leases with shorter terms are also allowed in Jordan, such contracts have higher rents (the one-year contract of lease, under Jordanian law, cannot be broken).

Read Landlord and Tenant »


Regional traumas impinging on growth

Jordan’s economy grew by 2.1% in 2016, the lowest level in two decades, as the chaos in Syria and Iraq adversely impacted the country’s exports, tourism, and overall economic performance.

Jordan gross debt

To jumpstart the economy, His Majesty King Abdullah recently unveiled an ambitious economic stimulus plan (2018-2022) that includes reforms in various sectors, numerous projects worth JOD6.9 billion (US$9.7 billion) and private sector investment opportunities amounting to JOD9.5 billion (US$13.4 billion). The plan also aims to generate jobs and develop human resources.

The economy is projected to expand by a modest 2.3% this year and by another 2.5% in 2018, according to the IMF.

The IMF approved a three-year extended arrangement under the Extended Fund Facility (EFF) for Jordan in August 2016 for an amount equivalent to US$723 million, on condition that the government reduces public debt as a percent of GDP from 93% currently to 80% by 2021.

Jordan GDP inflation“Public debt needs to be put on a downward path through gradual fiscal consolidation over the medium term while preserving essential social spending,” the IMF noted.

The public sector deficit fell from 7.1% of GDP in 2015 to 3.8% of GDP in 2016, thanks to the strong improvement in the performance of the National Electric Power Company (NEPCO) and in the central government’s primary balance.However due to weak economic growth, the country’s public debt to GDP ratio increased to 95.1% last year.

Unemployment is rising. In 2016, nationwide unemployment rate stood at 15.8%, up from 13.6% in 2015 and 12.3% in 2012.

Inflation in 2016 was -0.8%, owing to a decline in food and fuel-related prices. The IMF expects it to increase to 2.3% this year and to 2.5% in 2018.

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