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AMMAN – Prices of residential apartments are likely to go up by at least 15 per cent this year as demand is projected to outweigh supply,  Jordan Housing Developers Association (JHDA) President Kamal Awamleh said Tuesday. 

Awamleh's comments came a day after an official report revealed that trading in the Kingdom's property market reached unprecedented figures. Real estate trading exceeded JD7.7 billion in 2014, a 22 per cent rise over the JD6.3 billion registered in 2013, and a 38 per cent increase over the JD5.6 billion in 2012. 

According to the JHDA chief, the value of the 36,208 housing units sold last year was around JD5 billion. Sales of residential apartments increased in 2014 by 19 per cent, as a total of 30,380 units were sold in 2013. 

The leading housing investor said the trading figures in the real estate market came in line with the association's forecast, adding that trading is set to continue an upward trend, but at a slower pace because developers would carry out less housing projects. 

The uptrend would be driven by higher value of properties and not a greater number of residential apartments, he explained, attributing the projected slowdown in building homes to limited land plots available in the capital. 

He cited figures from the Department of Land and Survey, which showed that sales of land only grew by 2 per cent, as an indicator for the projected slower building activity. 

"Usually housing developers buy around 80 per cent of the land, but the slight increase in land sales shows that home builders are not buying land for their projects," he said, adding that demand for apartments is set to be greater than supplier, which he said would push prices up.

"We expect at least a 15 per cent increase in the prices this year," Awamleh noted. 

Jordanian expats effect

Awamleh told The Jordan Times that, in 2014, Jordanians bought 90 per cent of the housing apartments valued at JD4.68 billion. DLS data showed that non-Jordanians purchased only 3,604 apartments valued at JD315 million. 

He described Jordanian expatriates as the main driver for the sector's growth, noting that nearly 50 per cent of the apartments sold every year are usually bought by Jordanian professionals working in the Gulf region.

Expats find the property market as a safe investment, he said, explaining that some expats buy apartments and put them for rent. 

Official figures estimate the number of Jordanians who work in the Gulf at nearly 750,000. They work there as engineers, doctors, bankers, accountants and consultants among other professions. 

Shift to Amman outskirts

The JHDA president indicated that purchasing options inside the capital are becoming more limited due to higher prices caused by expensive land prices, noting that buyers have started to prefer the outskirts of Amman in areas such as Shafa Badran, north, and near the Airport Road, south of Amman. 

The price of a square metre of land in Shafa Badran is around JD250, while in the western part of the city it reaches over JD800 per square metre, he said. 

In some areas in western Amman, according to him, a square metre could be priced at JD1,500.

‘Investors not happy’

Awamleh said Jordanian housing developers are seeking investments outside the Kingdom due to restrictions imposed by the Greater Amman Municipality (GAM) on the number of floors allowed and due to banning projects in certain areas of the city such as Luweibdeh and Naour. 

GAM officials were not available to comment. 

He said that 150 housing companies have reduced their business in Jordan and are currently investing in other countries such as Egypt, Dubai, Turkey and even Kyrgyzstan. 

"The sector is no longer attractive to major investors," he said, calling on authorities to give more incentives to the sector which supplies the state treasury with  hundreds of millions in taxes and fees. 

AMMAN — Air Arabia, the first and largest low-cost carrier in the Middle East and North Africa, announced Monday in a press statement that it will open a new international hub at the Queen Alia International Airport in Jordan, its fifth fixed-based operation globally, following the acquisition of a 49 per cent stake in Petra Airlines.

The deal will see the existing principle shareholder of Perta Airlines, RUM Group, maintain a 51 per cent stake.

"The new partnership will also lead to the creation of Air Arabia Jordan and will reinforce the airline's leadership of the low-cost aviation market in the MENA and Levant region," the press statement said.

Following the acquisition and the establishment of the new  Air Arabia Jordan, operations' is expected to commence in the first quarter of 2015. The newly established carrier, managed by Air Arabia, will follow the carrier's business model serving as Air Arabia's fifth hub in the Arab world.

Air Arabia Jordan will provide direct service to a range of destinations across the Europe, Middle East and North Africa region from Queen Alia International Airport. 

AMMAN — Real estate trading last year registered a record JD7.76 billion, 22 per cent higher than the amount  in 2013 when it stood at JD6.34 billion, the Department of Land and Survey (DLS) said on  Monday.

In its annual report e-mailed to The Jordan Times, the DLS revealed an overall 105,643 real estate transactions were registered in 2014, an increase of 7 per cent compared with 2013.

Of the total, 43,386 were registered in Amman (41 per cent), and 62,257 were registered in the other 11 governorates (59 per cent).

In Amman, 24,871 transactions were for apartments and 18,515 for land while in other governorates  11,337 were for apartments and 50,920 for lands. 

The DLS pointed out that its revenues in 2014 reached JD425.6 million, a 20 per cent increase over the figure collected in the previous year.

The amount would become JD507.1 million if JD81.5 million in apartment exemptions are taken into consideration, 22 per cent higher than the figure in 2013

The JD81.5 million in apartment exemptions last year were 37 per cent higher than the amount in the previous year.

According to the report, non-Jordanians last year accounted for 5,170 purchase transactions, 3,604 of which were for buying apartments and 1,566 for buying lands, at an estimated value of JD492 million, a 21 per cent increase compared with 2013.

The value of apartment purchases by non-Jordanians amounted to JD315.3 million, constituting 64 per cent of the total, with the value of land purchases amounted to JD176.7 million representing the remaining 36 per cent.

Iraqis topped the list of non-Jordanian investors with 2,224 real estate deals, followed by Saudis at 822. Kuwaitis came in third place with 471 deals and Syrians  with 445. 

In terms of the value, Iraqis were atop as they invested JD266.3 million, accounting for 54 per cent of non-Jordanian real estate trading.

Saudis ranked second with purchases valuing JD64.1 million that constituted 13 per cent of non-Jordanian purchases; Syrians came in third place with JD28.5 million, constituting 6 per cent; with Emiratis buying real estates worth JD17.4 million constituting 3.5 per cent.

Of the overall 105,643 real estate transactions that were registered in 2014, an increase of 7 per cent compared with 2013, 43,386 were registered in Amman (41 per cent), and 62,257 were registered in the other 11 governorates, (59 per cent).

In Amman, 24,871 transactions were for apartments and 18,515 for lands, in other governorates  11,337 were for apartments and 50,920 for lands.

AMMAN – The commercial sector expects 2015 to be a challenging year due to "disappointing" government policies. 

At a press conference on Sunday, Amman Chamber of Commerce (ACC) President Isa Murad and board members said the government decision to increase electricity prices as of January 1 and the new income tax law would not only cause slowdown in demand for goods this year but also would reduce tax revenues from the sector. 

Murad listed a number of issues which he said would hurt the performance of economic and commercial activity this year. 

The biggest concern for traders, according to Murad, was raising income tax rate on commercial and service companies from 14 per cent to 20 per cent. 

This could force many investors to leave the Kingdom to other regional markets, he said, warning that raising taxes could also encourage tax evasion. 

Murad added that the commercial sector is the largest employer of Jordanians as it employs over 380,000 workers, representing 38.5 per cent of the overall labour force in the Kingdom. 

Noting that the sector is also the biggest source of tax revenues to the treasury, he indicated that commercial activities generated around JD1.9 billion in sales tax in 2013, around 76 per cent of the sales tax revenues. 

The ACC president described the 15 per cent increase in electricity tariffs, which went into effect on Thursday, as a challenge for the sector. 

Over five years, Murad said electricity prices went up by 92 per cent, warning that the recent increase would reduce demand for goods as the rise in operational costs of merchants would automatically be reflected on consumers who, according to him, suffer from fading purchasing power due to rising living costs while their incomes remain fixed. 

The ACC chief called on the government to reconsider its decision regarding power tariffs as global oil prices have been going down sharply. 

"Instead of raising electricity tariffs, the government should solve the issue of waste in electricity that costs over JD300 million a year," he said, adding that the five-year government plan to end the losses of the state-owned National Electric Power Company by 2017 should be revised in light of the decline in oil prices.  

ACC Vice Chairman Ghassan Kherfan said a number of companies have left the Jordanian market and settled in other regional countries, which he said are more competitive in terms of taxes and energy costs. 

"Many IT, real estate and construction firms left Jordan when the income tax rate was 14 per cent. With the new rate of 20 per cent, we are afraid that many others would leave, "Kherfan noted.

RIYADH — Billionaire Prince Alwaleed Bin Talal has lashed out at the Saudi fiscal policy after projecting the largest ever budget deficit for 2015 following the slump in oil prices.

"We have reached the danger point... after starting to withdraw from the reserves," to meet the budget shortfall, Alwaleed said in a letter addressed to the finance minister.

Last week, the world's biggest crude exporter announced an expansionary 2015 budget with the largest-ever deficit of $38.6 billion. 

It projected spending at $229.3 billion, a slight rise from last year's estimates, and revenues at $190.7 billion, sharply down from $228 billion projected in 2014.

Saudi Arabia, the lead producer in the Organisation of the Petroleum Exporting Countries (OPEC), also said it estimates 2014 actual budget deficit at $14.4 billion as both spending and revenues far exceeded projections.

Alwaleed, a member of the Saudi ruling family and the wealthiest Arab private investor, said Riyadh should not have let spending rise above projections, especially after oil prices began to decline.

Oil income contributes about 90 per cent of public revenues in the OPEC kingpin which pumps around 9.6 million barrels per day.

If the government had contained last year's spending within projections, a surplus of at least $50 billion would have been posted, the prince added.

As a result of failing to check rising spending, a total of $53 billion will be withdrawn from fiscal reserves, estimated at $750 billion, in just two years, he indicated.

Alwaleed also criticised the way Saudi reserves are invested, saying because most of them are invested in US and European bonds, they have low yields at around 2.4 per cent annually.

The reserves are currently managed by the Saudi Arabian Monetary Agency, or the central bank. 

Alwaleed called for the creation of an independent sovereign wealth fund to invest the reserves and increase the returns to around 7-8 per cent.

If oil prices remain at the current level of under $60 a barrel for benchmark Brent crude, Saudi Arabia is expected to lose half of its oil revenues of $276 billion posted in 2013. Oil income in 2014 was estimated at $248 billion.

Separately, Iran's deputy foreign minister told Reuters that falling world oil prices will hurt countries across the Middle East unless Saudi Arabia, the world's biggest crude exporter, takes action to reverse the slump, Iran's deputy foreign minister told Reuters.

Hossein Amir Abdollahian described Saudi Arabia's inaction in the face of a six-month slide in oil prices as a strategic mistake and said he still hoped the kingdom, Tehran's main rival in the Gulf, would respond.

Oil prices closed on Wednesday at a 5-1/2 year low, registering their second-biggest ever annual decline after OPEC oil exporters, led by Saudi Arabia, chose to maintain oil output despite a global glut and calls from some OPEC members, including Iran and Venezuela, to cut production.

"There are several reasons for the drop of the price of oil but Saudi Arabia can take a step to have a productive role in this situation," Abdollahian said.

"If Saudi does not help prevent the decrease in oil price...  this is a serious mistake that will have a negative result on all countries in the region," Abdollahian added in an exclusive interview last week.

Abdollahian said Iran would have more discussions with Saudi Arabia about the oil price, both through oil officials at OPEC and through the foreign ministry. He did not give specific details on when any meeting might take place.

Saudi Arabia said last month that it would not cut output to prop up oil markets even if non-OPEC nations did so.

NEW YORK — Looking for a safe, affordable place for retirement? With its warm climate, affordable housing and generous benefits, Ecuador was named the best country to retire in by InternationalLiving.com.

The South American nation bordered by Colombia and Peru topped the website's annual global retirement index of 25 best countries, scoring high points for affordable cost-of-living, entertainment and amenities.

Next are Panama, Mexico, Malaysia and Costa Rica, rounding out the top five nations in the index that looks at eight criteria to determine the best countries for retirement.

"The world's top retirement havens for 2015 may dot the landscape from Asia to Latin America to Europe, but they share certain assets," said Jennifer Stevens, executive editor of InternationalLiving.com.

"They're safe, offer good value and are places you can settle with relative ease," she added in the statement announcing the results.

Ecuador scored 92.7 out of 100 points, with top marks for climate, cost of renting or buying property and discounts on flights, public transportation and utilities offered by the government for retirees.

"Although prices have risen slightly in recent years, Ecuador's real estate is the best value you'll find anywhere," indicated Dan Prescher, senior editor at the website.

Panama is considered the best destination in Central America and offers a Pensionado visa, which is available to anyone with a lifetime pension of more than $1,000. The visa offers discounts on medical services, entertainment, meals, air fares, as well as electricity and phone bills.

"For under $2,000, a couple can live comfortably in a country with a well-earned reputation for being expat-friendly," according to the website.

Malaysia, the top retirement country in Asia, earned high scores for ease of fitting in, entertainment and amenities, as well as low cost of living. A meal with a bottle of wine can cost as little as $5 and a visit to the doctor just $15.

In Europe, sixth-place Spain was the top retirement nation thanks to its warm climate and low cost of living compared with other European countries. 

Spain scored top marks for infrastructure, a healthcare system recognised by the World Health Organisation as one of the best in the world, and entertainment.

Neighbouring Portugal came in at No. 9, followed by Thailand, which won points for low healthcare costs, culture and affordable housing. 

Seventh-place Malta and Colombia at No. 8 completed the top 10.

KUWAIT CITY — Stock markets in the energy-rich Gulf states dived in the fourth quarter of last year due to the slump in oil prices after posting strong gains in the first nine months of 2014.

All the seven bourses ended the October to December period in the red amid a wave of panic sell-offs after oil lost about 50 per cent of its value because of weak demand, a glut in production and a strong US dollar.

In the fourth quarter of last year, the Saudi stock market slumped 23.2 per cent, Dubai dived 23 per cent, Oman dropped 15.2 per cent and Kuwait by 14.3 per cent. Abu Dhabi dipped 11.2 per cent, Qatar lost 10.5 per cent and Bahrain was 3.4 per cent down.

But by the end of 2014, four markets, Qatar, Dubai, Abu Dhabi and Bahrain, posted annual gains while the Saudi, Kuwaiti and Omani bourses recorded dips.

Oil income makes up around 90 per cent of revenues of most of the Gulf states which are forecast to lose half of their oil revenues, which stood at $729 billion in 2013.

"The fall in the fourth quarter was a direct result to the sharp drop in oil prices," said Humoud Al Sabah, senior analyst at Kuwait Financial Centre (Markaz).

"Most of the Gulf bourses ended the first three quarters with strong gains but shed most of it due to the impact of oil prices," Sabah indicated.

He added that Gulf shares performed well in the first three quarters despite turbulent geopolitical developments especially the expansion of Islamist State jihadists in Iraq and Syria and the start of the US-led air campaign against them.

The capitalisation of the seven bourses, however, rose by around $70 billion to $1.04 trillion at the end of 2014 from $970 billion a year ago.

But they shed around $131 billion from their value on September 30.

Dubai most volatile 

The Saudi Tadawul All-Shares Index (TASI), the largest bourse in the region, closed 2014 down 2.4 per cent at 8,333.30 points after repeatedly dipping below the 8,000-point mark.

During  last year, TASI had surged by over 30 per cent but was pulled down mainly by the leading petrochemicals sector, which dived 33.7 per cent in the fourth quarter.

The drop came despite the kingdom issuing a highly expansionary budget for 2015 but which projected a deficit of around $39 billion.

Dubai Financial Market (DFM) Index, which has increased steadily for the past three years, was the most volatile in 2014, surging by about 60 per cent in the year before losing most of the gains in the fourth quarter.

The DFM Index ended 2014 up 12 per cent at 3,774.00 points after dipping below the 2013 close in December.

Its neighbouring Abu Dhabi Securities Exchange also relinquished most of the year's gains but ended 2014 up 5.6 per cent on 4,528.93 points.

Qatar Exchange, the second largest in the Gulf, emerged as the top gainer with 18.4 per cent on 12,285.78, after surging close to the 14,000-point mark on several occasions.

Kuwait Stock Exchange was the biggest loser, dropping 13.4 per cent to 6,535.72 points.

Muscat Securities Market ended 2014 down 7.2 per cent at 6,343.22 points, while the tiny Bahrain bourse finished the year up a healthy 14.2 per cent at 1,426.57 points.

NEW YORK — Oil prices fell on Wednesday as concerns about demand for fuel kept worries about a global supply glut intact.

Both Brent and US crude significantly pared losses just before government data showed US crude oil inventories fell 1.8 million barrels last week, a bigger drop than analyst expectations for a 100,000-barrel dip in stocks.

After initially paring more losses, crude futures pushed lower.

US gasoline stocks rose 3 million barrels and distillate stocks were up 1.9 million barrels last week, data from the Energy Information Administration (EIA) showed, as refiners lifted capacity utilisation 0.9 percentage point to 94.4 per cent.

The EIA data followed American Petroleum Institute data released on Tuesday that showed an increase in US stockpiles.

Brent February crude was down $1.25 at $56.65 a barrel at 1609 GMT, after dropping as low as $55.81, its weakest since May 2009. US crude was down $1.02 at $52.92, off its $52.51 intraday low.

Slated for a nearly 49 per cent decline in 2014, Brent's retreat is set to be the biggest since 2008, when prices fell 51 per cent in response to a demand slump after the financial crisis. Prices then were eventually propped up when the Organisation of Petroleum Exporting Countries (OPEC) formally decided to cut production.

In contrast, OPEC this year, at a November 27 meeting, decided against a cutback to defend its market share, against shale oil and other competing supply sources, despite its own forecasts of a growing surplus in 2015.

"Fundamentally, the market remains weak with the near 2 million barrels build in Cushing that kind of offsets the total drop of almost as much in [overall] crude stocks," said Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut.

Crude stocks rose 2 million barrels at the Cushing, Oklahoma, delivery point for the US crude contract, the EIA said.

Crude prices came under more pressure on Wednesday from a survey showing China's factory sector shrank for the first time in seven months in December, a bearish indication on the strength of oil demand in the world's second-largest consumer.

Turmoil in Libya has effectively led to a drop in OPEC supply in December to a six-month low, a Reuters survey showed on Tuesday, although forecasts still point to a large excess supply next year.

The Obama administration on Tuesday reacted to months of increasing pressure to lift a 40-year-old ban on exports of most domestic crude, taking two steps expected to increase the flow of ultra-light oil, or condensate, onto the global market.

"We expect a gradual, but slow increase of stabilised condensate exports over the next year," analysts at JBC Energy indicated in a report.

The Seaway Twin crude oil pipeline shipped initial volumes to the Gulf Coast from Cushing on December 21, the company said on Wednesday.

Allowing more crude to get to the Gulf Coast's giant refining hub is expected to be a bearish development for US crude futures.

AMMAN — The budget deficit at the end of November 2014 amounted to around JD696 million compared with JD898 million at the end of the same period last year, Finance Minister Umayya Toukan said on Tuesday.  

In a statement, the minister said the deficit figure is in line with financial reforms and the state budget law. 

According to financial data for the first 11 months of this year, total local revenues and external grants amounted to around JD5.6 billion, a 19.5 per cent increase over the JD4.7 billion during the same period of last year.

Local revenues amounted to around JD4.9 billion, 18 per cent higher than the JD4.1 billion during the same period of last year.  

The data showed total expenditure reached around JD6.3 billion compared with JD5.6 billion, a 12.8 per cent increase. 

Toukan said net public debt was 7.2 per cent higher at the end of November 2014, as it reached around JD20.4 billion, representing 80 per cent of the estimated gross domestic product (GDP) for 2014.

Net public debt in 2013 amounted to JD19.1 billion, representing 80.1 per cent of last year's GDP.  

The statement said the net public debt includes the amounts borrowed to cover the cumulative debt of the National Electric Power Company, which is close to JD4.5 billion, or 17.6 percentage points of  GDP up to November 2014. 

As a result (of this borrowing), the net public debt  rose from around 62.4 per cent to around 80 per cent of the GDP estimated for 2014, the statement indicated. 

Turning to the issue of increasing transparency and further financial disclosures, Toukan said the ministry is working to ensure a periodic issuance of the ministry’s financial bulletin, which seeks to display financial data in a transparent manner.

The ministry’s last issued bulletin included additional data on the public debt, he added.

AMMAN — Jordan Chamber of Commerce’s (JCC) board of directors on Tuesday informed Senator Marouf Bakhit, Senate 2nd deputy president, and Jamal Gammoh, head of the Lower House’s energy and mineral resources committee, that raising electricity charges will negatively affect the competitiveness of the industrial sector and will lead to increasing operational costs.

In a JCC statement, the board said such a step would lead to job cuts at factories and stoppages or force industrialists to shift to neighbouring countries.

The board called on the Parliament to support the industrial sector and convince the government to freeze the decision at the current time, until a committee studies the effects.

The board noted that all studies JCC has made show that the sector will be “greatly” harmed. Bakhit stressed the importance of supporting the sector due to its high ability to employ Jordanians and its contributions to the national economy.