Plummeting apartment sales may pave way for illegal construction, developers warn

AMMAN — The Jordan Housing Developers Association (JHDA) President Zuhair Omari on Monday warned of social impacts, including a rise in haphazard illegal construction, resulting from the public’s low purchasing power and plummeting apartment sales. 

The Department of Land and Survey (DLS) announced in its monthly report that total apartment sales in the Kingdom reached only 19,500 units from the start of 2019 until the end of August, compared to 22,500 in the first eight months of 2018, recording a 13 per cent decrease.

Omari had earlier said the sector had been witnessing a steep regression since 2015, citing the drop in Jordanians’ purchasing power as the main cause for the market’s troubles.

When asked about apartments sales in 2014, Omari said that around 41,000 were sold in that year. 

Apartments less than 120 square metres, which were sold in the first eight months of 2018 stood at 6,600, compared to 7,600 of the same size in the same period last year, according to the report. 

As for apartments sized between 120 and 150 square metres, a total of 6,700 were sold in the first eight months of 2019 compared to 8,100 in the same period of 2018.

Omari noted that high living costs have decreased people’s purchasing power, besides the increase of interest rate on housing loans, which he said should be lowered as well.

To mitigate the situation, Omari earlier suggested steps that the government could take, including exempting the first 150 square metres of an apartment from registration fees and scrapping the property transfer fees for apartments of all sizes, as such exemptions are currently restricted to apartments of up to 180 square metres only.

In light of the increase in land prices, Omari also suggested lifting the cap on the number of stories existing buildings are permitted to have.

“If the situation remains the same and nothing is done, we may not only be facing financial and housing problems, but issues of a social nature as well, as people could start building illegally anywhere in a haphazard manner,” Omari told The Jordan Times.

“People could start building more apartments and exceed the lawful limits, which could lead to disputes or create neighbourhoods with high crime rates. This has happened in many countries,” he added.