Housing developer blames slow GAM procedures for expected sector losses

AMMAN — Apartments offered by the housing sector are expected to drop by 15 per cent in 2015 compared with 2014, a sector leader said Monday.

The Greater Amman Municipality’s (GAM) procedures in issuing licences for housing companies take five to six months, and issuing construction permits needs another six months, Jordan Housing Developers Association President Kamal Awamleh said, blaming GAM for taking a long time to provide the necessary documents.

Awamleh noted that it takes only 10 days to obtain these papers in Irbid, 80km north of Amman, and Balqa, 35km northwest of the capital.

“This slow pace in issuing these documents will contribute to raising the prices of apartments in Amman by almost 8 per cent in 2015,” Awamleh argued, adding that housing companies need 12 months for permission and another 10 to build these units.

He said companies usually make a 15 per cent profit in selling their apartments, but with these slow procedures it takes them two years, instead of one, to sell their products, which means a 50 per cent drop in their profits.

“The Department of Lands and Survey [DLS] announced that apartment sales dropped by 14 per cent and land sales also went down by 26 per cent during the first two months of 2015,” Awamleh noted.

Real estate trading last year registered a record JD7.76 billion, 22 per cent higher than in 2013 when it stood at JD6.34 billion, according to the DLS annual report issued earlier this year.

Awamleh said land sales to housing companies recently declined by 90 per cent, attributing the decrease to the fact that many companies stopped their investments and moved to other sectors, or moved abroad to destinations like the United Arab Emirates and Turkey, where it is more profitable.

“The local market needs 40,000 to 45,000 apartments annually, with housing companies producing 95 to 97 per cent of them,” he said, noting that the sector includes 2,500 companies most of which are based in the capital and Irbid.

Awamleh called for increasing the pace of issuing the required documents and opening an investment window for the sector, due to its important role in the national economy.