The total value of property deals in Jordan fell 38 percent to 2.78 billion Jordanian dinars ($3.92 billion) in the first eight months of 2009 compared to the same period a year earlier, official data showed on Monday.
Department of Land and Survey figures showed turnover stood at 4.46 billion dinars in the eight months to August 2008, before the impact of a global downturn began to slow economies across the Gulf region, hurting business and dampening domestic consumption.
The official data, however, showed that foreign purchases of apartments, commercial units and real estate assets rose 22 percent to 169.1 million dinars in the same period in 2009 against the first eight months of 2008.
Iraqis bought a total 79.7 million dinars worth of property, top among the list of non-Jordanian investors followed by holders of U.S. passports - mostly Jordanian expatriates living abroad - who bought 17 million dinars worth of property.
The government's revenues from property sales also fell 38 percent to 174.2 million dinars in the first eight months of the year, the official data showed.
Jordan's economy has been hit by the global financial crisis as investment flows from the oil producing Gulf region plummeted along with a drop in remittances from its sizeable expatriate labour force.
Industry executives expect the market to remain depressed until mid-2010 when an oversupply in luxury apartments ease and commercial banks ease tighter credit terms for property loans.
"Prices have gone down on average 20 percent this year as demand shifts to smaller units and cheaper property while large developers who were leveraged hit harder," said Mohammad Afifi, managing partner of the Jordanian franchise of U.S. based Century 21 real estate agents told Reuters.
"Lack of demand and absence of serious lending will continue to depress prices...We see a rebound by mid-next year as soon as the inventory of units dries up," Afifi added.
Real estate executives say some large property developers, mainly Dubai based firms, that had planned billion dollar projects, have put existing projects on hold or shelved them altogether.
Several mega projects in the country's once booming property market, including a $2 billion downtown project in which Lebanon's former assassinated prime minister Rafik Hariri's family are major shareholders, have also slowed due to financing problems.
Jordan's once booming property market was underpinned by strong demand from Iraqis, Syrians and Palestinians and even Lebanese seeking a safe haven in a country with a record of political stability.
Industry executives say alongside demand from Arabs in neighbouring countries, Gulf investors flush with oil revenue had poured over the last decade hundreds of millions of dollars into the real estate market, attracted by free market polices and relatively low prices compared with other regional markets.