“Jordan’s Real Estate Market Collapsed” – Inaccurate News

AKEED – Rasha Salameh

News of a sizeable drop in the real estate sector in Jordan is inaccurate and unsubstantiated, Jordan’s Media Credibility Monitor “AKEED”, which fact-checked the news, said in a report.

Catchy headlines were used to describe the recent slowdown in the housing activity, e.g. “Jordan’s Real Estate Sector Collapses” and “The Collapse of the Real Estate Sector, a Crisis Facing Razzaz,”. The journalists also reached erroneous conclusions in their reports. Accordingly, the writers committed several professional violations in their reporting, the online portal stated.

In determining the accuracy of the information, market indicators for this year were compared with previous years and experts were consulted. AKEED concluded that the sector has entered a “recession, but has not collapsed.”

Zuhair Al-Omari, President of Jordan Housing Developers Association, explained that the housing sector witnessed a deceleration that began in 2015. “However, there has been a reversal following amendments introduced to the building codes three weeks ago, with further improvement expected in in the next few months.” He told AKEED.

“It is the beginning of a recovery in the sector, not a collapse,” he stated, adding that “under the amendment, new housing projects will be built at lower costs. In addition, the government plans to subsidize housing loans granted to beneficiaries, specifically the youth. What borrowers will pay in loan instalments will be equal to the amount they would pay if they rent a house, noted Omari.

This is a promising sector in Jordan, given the high population growth and the continued need for housing, said the developer. He cited a World Bank report which indicated the need for 65,000 housing units annually in the Kingdom. The number of houses purchased and registered, however, is less than 25,000 units a year. This means that, explained the expert, the problem is not with the sector, but rather with affordability.

Tareq Barraj, head of a financial leasing company reported a decline in sales and diminishing demand adding that there is a clear financial crunch, but not a collapse. “It is an extreme form of recession.”

 “Our company has not added any new flat since 2017. We have not been able to sell units built earlier due to weak demand. Recession has become noticeable as of 2017,” he told AKEED in an interview.

Na’el Abu Hantash, head of Abu-Hantash Housing Company put the decline in sales at around 60% in the last two years or so. He told AKEED that he could not determine whether or not the sector has collapsed, but he is optimistic that the recent amendments could be the beginning of a positive change.

It is worth mentioning that some news items made unsubstantiated conclusions without seeking expert opinion such as “The sector is facing a recession and incurring heavy losses ... The sector is under intolerable pressures.” Others reported that “Among other Arab nationalities, Jordanians came in second place in purchasing real estate in Turkey.”

It is worth noting that this is not the first time that similar news are posted without sufficient verification.