New government statistics reveal that rental prices for housing units in Jordan increased during the first half of 2011, prompting some observers to call the rise a sign of economic growth.
Some tenants countered, however, that higher rents add an undue burden on average citizens, especially when combined with price increases for other goods and services.
According to data from the Department of Statistics in the Ministry of Planning, rents increased 5.15% in the first half of 2011. The increase exceeds the general inflation rate of 4.64% recorded by the Jordan Census report on inflation for the same period.
Zuhair al-Omari, president of the Housing Investors Society, said the rent increases are normal given the kingdom's growing population. The population is growing by 2.2% annually and exceeded 6.1 million in 2010.
"The increase in rental rates correlates to economic growth and inflation in general and is considered a standard economic indicator," al-Omari said, estimating that Jordan needs around 30,000 new housing units annually.
Official data show that the government issued more building permits in recent years as 37,111 residential building permits were issued in 2008, 23,658 in 2009, and 25,029 in 2010.
Mohammed Dheeb, president of the Tenants Protection Society, said rising rents are a result of the new Landlords and Tenants Law, which has placed new burdens on tenants while granting landlords unfair rights to raise property rents.
Dheeb said after the Landlords and Tenants Law went into effect, the holders of 130,000 pre-2000 lease contracts faced steep rent increases, adding that 60,000 of the properties are commercial and 70,000 are residential.
"Rents in some areas of Amman, especially for commercial properties, have seen huge spikes as a result of the law," Dheeb said. "The annual rent for one shop in the old downtown rose from 4,000 dinars ($5,600) to over 13,000 dinars ($18,400) as a consequence of the owners being given the right to raise rents."
The government of former Prime Minister Samir al-Rifai approved the Landlord and Tenant Law in December 2010. The current government, led by Prime Minister Marouf al-Bakhit, made additional amendments that generated negative responses.
According to Mohammed Kaabnah, head of the Landlords Society, the new law is not fair to landlords because evicting a tenant from a rental property, whether commercial or residential, can only be accomplished through lengthy legal action.
"The relationship between tenant and landlord has always been positive and goodwill has prevailed between them, and the two sides were able to agree on a rent increase and about possibly vacating the property," Kaabnah said. "But real estate property is an asset that should revert back to its owner if he wants the tenant to vacate it".
Kaabnah believes that the rise in rents during the first half of the year for prime commercial sites in Jordan is consistent with economic expansion and competitive growth.
Khaled Fahim, a tenant in an Amman suburb, told Al-Shorfa the rise in rents follows the spike in prices for goods and services recorded since 2007.
Fahim said his apartment lease was 120 dinars per month in 2007. Now his rent is 160 dinars because the landlord cited the rise in the cost of living as well as new tenants accepting to pay the rent.
A recent report by Asteco Property Management said Jordanian real estate prices remained stable during the second quarter of 2011 as the market showed signs of recovery, particularly in the sale and leasing of private apartments and villas.
The Asteco report stated that rents for two-bedroom apartment range between 3,000 dinars and 13,000 dinars. Three-bedroom apartments rents range between 6,000 dinars and 24,000 dinars, a 3% increase compared with the first quarter of 2011.
Mahmoud al-Saudi, the owner of Iskan Company, said rent increases are a positive development that supports the Jordanian economy on account of the kingdom's transformation into a business hub and the desire of international companies to open regional headquarters in Amman.
"The bulk of the increase in property prices and rent is in commercial real estate, not residential, and in distinct areas that are in high demand by local, Arab, and foreign investors," al-Saudi said.