18 September 4, 2015 Economy

Jordan’s cabinet bails out real estate market

Raied T. Shuqum estimated value of $692 million, a 21% increase over 2013. The value of non-Jordanian Amman apartment purchases amounted to $443 million, while land purchases ordan’s cabinet is seeking reached $248 million, DLS said. to stimulate the real estate Still, Awamleh insisted that per- sector in the wake of a slow- formance could have been much down blamed on red tape by better. the Greater Amman Munici- “The real estate sector wit- Jpality (GAM), which oversees pri- nessed a slowdown due to GAM’s vate and public construction. measures,” Awamleh stressed. He The slowdown, following record pointed out that they included high trading in 2014, triggered the time-consuming paperwork, limi- cabinet to announce incentives on tations on the number of flats each July 22nd to jump-start real estate building can have and long delays trading. The incentives, valid un- in connecting new buildings to util- til the end of the year, include tax ities, such as water, electricity and reductions and registration fee and sewage. fine exemptions. The cabinet’s move is expected The value of to attract Jordanians and other Arabs who have been investing in non-Jordanian land and apartment units across apartment relatively stable Jordan as violence purchases amounted rattles the region from Syria to to $443 million Yemen. Foreign Arab investors come “Developers want to construct from Syria, Iraq, Libya and Yemen buildings with 15 smaller apart- and even petroleum-rich Saudi ments but GAM forces them to Arabia and Kuwait, according to build only ten,” he said. He said the Jordan Housing Developers As- guidelines resulted in larger apart- sociation (JHDA) President Kamal ments that a majority of Jordani- Awamleh. ans cannot afford and led to fewer Newly built apartment buildings in the suburbs of Amman. “In 2014, Iraqis topped the list of housing projects being built. non-Jordanian investors with 952 The cabinet’s incentives coincid- real estate deals, followed by Sau- ed with agreements between hous- lion collected in the same period million in 2014, $3.4 million in 2013 did not because prices of steel and dis at 822, Kuwaitis at 471 and Syri- ing investors and GAM to speed up of 2014. Under the government’s and $2.3 million in 2012. other construction material in- ans with 445 deals,” Awamleh said. licencing and registration meas- incentives, the first 150 square Awamleh said investors would creased during the first half of 2014, ures, Awamleh said. He said GAM’s metres of homes 180 sq. metres or lobby the government to extend Nijmeh said. In 2014, Iraqis delays had caused financial losses smaller are exempt from registra- the incentives beyond 2016. Prior to the decision, demand topped the list of for housing companies. tion fees, while any home larger “The real estate sector contrib- was mostly focused on apartments During the first six months of than 180 sq. metres has no exemp- utes to the economic activity of ranging from 120-150 sq. metres. non-Jordanian 2015, real estate trading saw an tions. Additionally, registration more than 40 other sectors,” which But with the new decision, buyers investors with 952 11% drop to $4.83 billion, down fees and tax levied on properties of Awamleh said would boost the started to look for apartments up to real estate deals from $5.42 billion recorded dur- all sizes were halved to 5%. kingdom’s overall economic per- 180 sq. metres, Nijmeh said. ing the corresponding period in The new rates apply on those formance. Salameh Ghandour, a bank em- He said he did not have the 2014, according to DLS figures. In who buy more than one home. Un- Awamleh, who described the in- ployee, said he had been looking for amounts for the foreign ownership June, trading in the real estate sec- der the previous regulation, regis- centives as “good news” for inves- an apartment for several months. but he noted that the overall real tor dropped 18% to $840 million, tration and taxes of up to 20% were tors and buyers, said apartment He said the money he would save estate trading registered a record down from $1 billion in June 2014, levied on those who buy a second sales tripled since the decision. “We on his new apartment would be $10.96 billion in 2014, 22% higher the figures showed. home, which is largely considered expect sales to keep rising sharply used on an extended honeymoon. than in 2013. “Early 2015 has been a tough an investment. Other incentives until the end of year,” he said. “That way, I will start a new life The Department of Lands and period for developers and buyers include exempting non-Jordanian Construction engineer Saleem as a happier man. A happy wife Survey (DLS) said in its annual re- alike,” Awamleh lamented. investors from fines related to de- Nejmeh said the sale price of apart- makes a happier man,” he said. port that real estate transactions As a result, government reve- layed investments. ments of 180 sq. metres or less went in 2014 stood at 105,643. Of the to- nues in six months starting in Janu- Mohammad Sawafieh, head of down slightly after the govern- Raied T. Shuqum, based in tal, non-Jordanians accounted for ary declined 13%, standing at $258 DLS’s legal unit, said revenue gen- ment’s incentives. Amman, has reported on regional 5,170 purchase transactions at an million, compared with $296 mil- erated from the fines totalled $2 The cost of apartments, however, issues since 1999. ’s troubled Syphax Airlines grounds flights

Syphax Airlines aeroplane.

Yassine Halila outstanding overdue balances”. to wet lease one of its two A390s to to deal with the wrath of infuriated which permits restructuring of fail- BSP is a system maintained by the Morocco’s for a few customers, some of whom were ing companies. IATA to simplify sales and payments weeks. stranded in airports. A government-sponsored bailout of services and operations among Beyond the fraught geopolitical The company provided an email package is possible as well. On Au- its 400 member airlines, which con- and economic context, Syphax had address where clients who booked gust 10th, a special cabinet meet- unisian privately owned trol 83% of worldwide air traffic. struggled since its founding in 2011. flights after July 30th can apply for ing requested the government’s Syphax Airlines an- Calling the IATA’s decision “sud- In 11 months, three different chief refunds. Bureau of Assistance to Struggling nounced the “temporary den, surprising and obstructive”, executive officers succeeded found- Syphax and Frikha have been si- Enterprises examine the Syphax suspension” of all of its Syphax blamed flaws in the BSP er Mohamed Frikha, who left the lent in the aftermath of the crisis case “with special consideration to flights to and from Tuni- system but admitted to having “fi- company in September 2014. despite the severe criticism of the the social aspect of the company, Tsia. nancial difficulties”, according to airline. On August 7th, Syphax em- namely its employees and techni- The International Air Transport the company’s lawyer Samia Mak- Syphax and Frikha ployees participated in a sit-in in cians”, according to government Authority (IATA), the global trade touf. have been silent in front of the company’s Tunis head- spokesman Dhafer Neji. association for the airline indus- Maktouf told Agence France- quarters. This sudden crisis deals a hard try, instructed partner airlines and Presse (AFP) that “the local, na- the aftermath of the They demanded intervention blow to Syphax’s ambitions. The agencies to cease business activity tional and international contexts crisis despite the from the government to save the airline planned to inaugurate direct with Syphax. have caused a crisis that is behind severe criticism of company and their jobs. flights to and from Tunis, Montre- The IATA suspended Syphax from this temporary suspension of Sy- The airline will have to defend it- al, New York and Beijing and had the IATA Billing and Settlement Plan phax Airlines’ activities”, referring the airline self in court, too, as a collection of placed orders to expand its fleet, (BSP), effectively forcing the Sfax- to the ailing Tunisian tourism sec- employees, shareholders and tick- composed of two A390-100 aero- based operator to ground its flights. tor, which was hard-hit by terrorist In addition to instability in sen- etholders is suing the company for planes. Last month, Syphax can- The IATA said the Tunisian air- attacks in March and June. ior management, Syphax competed refunds and damages. celled an order for three A320-200s line had been suspended from the Since June, Syphax has reduced with the state-owned national car- Even though the amount of Sy- placed in 2013. BSP due to “non-compliance with flights, keeping mainly those to and rier . phax’s outstanding debts is un- the Passenger Agency Conference from Tunisia and France, due to a Along with the the displeasure of known, Tunisian media speculated Yassine Halila is an Arab Weekly Resolutions concerning payment of drop in demand. Syphax proceeded its many creditors, Syphax has had the airline will resort to “law #95”, contributor in Tunis.