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Real Estate Prices in Jordan

Your comments & questions are welcomed at aboud@maktoob.com

Friday, August 25, 2006

As I had the chance to be in Jordan watching the Housing Market, I've seen the prices making very confident jumps since 2003, since the American war on Iraq, when the Iraqis, mostly the rich ones, start moving into Amman and buying assets.

But really the biggest jump ever, happened in 2006, where the prices got almost doubled comparing to 2005's summer.. It was something un-believable and at the same time unreasonable.

As I've learned from trading, that the biggest jumps in any prices are usually the last jumps before falling down, these jumps is almost done by the late comers who have less experience in the market, and these guys themselves who will pay very high prices for an over-valued items. This is very traditional in any market, in the time where the early comers are taking their profit and making out of the market, you will see the newly comers are buying the stuff and entering the market.

If you are located in Amman, or if you had the chance to be there for a while, you can notice how relaxed city it is, comparing to the other known capitals in the region.
You will notice also how many free, inbuilt and unused spaces in the city itself, lands that are not used for anything, in every street in the city, in all areas, high class areas or the areas that is less. Knowing that the real estate prices added 150% to its values since 2003, someone could ask, is there any need for these high prices, does it really reflect the demand and supply in this market? My answer is absolutely NOT.

This summer we start seeing people suffering from these high prices, and some of who had planned to make out of his rented apartment and buy one, he declined his plans as long as these prices are exist. Getting back to the driving horse of the market, supply and demand, I expect that we will see starting this winter, slowing down in the housing market, and this will have a clear effect on the prices sooner or later. I really don't know when we'll see the prices going down, loosing 30 or 40 percent of its current values, but what I know for sure, that we will not see any more jumps in this market.

My message: the prices had reached unreasonable levels, we will not see it staying there for long.

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