An Economic Analysis of Building Permits

Building permit data raises a question that goes beyond how much they increase: Is the Jordanian economy witnessing an expansion in new construction, or an increase in licensing of existing stock? Therefore, distinguishing between these two paths is necessary, since each carries a different impact on demand for building materials, labor, financing, and consequently on the sector’s contribution to growth.

During the first seven months of 2026, licensed areas increased by 4.7% compared to the corresponding period in 2025, to 5.84 million square meters, and the number of permits rose by 1.7% to 14,361 permits. However, this increase is insufficient to judge the direction of construction spending unless we know the nature of the buildings for which permits were issued.

Here emerges the most important indicator: Licensed areas for new buildings and additions declined during the first seven months of 2026 by 2.9% compared to the corresponding period in 2025, to approximately 3.4 million square meters, while licensing of existing buildings constituted 41.6% of the total. This means that the improvement in the overall index was not accompanied by an expansion in licensed areas for new construction and additions, and that a significant portion of licensing activity relates to buildings that already exist.

Similarly, residential areas increased during the first seven months of 2026 by 10.7% compared to the corresponding period in 2025, and constituted 81.6% of the total, while non-residential areas declined by 15.7%. This composition suggests that licensed activity is concentrated on residential construction, but it alone does not prove the strength of actual demand; the need for housing does not translate into purchases without adequate income and financing.

Residential construction generates economic activity and employment, but sustained growth also requires expansion of business facilities. Therefore, the decline in non-residential areas deserves monitoring, without considering it a judgment on declining investment generally; companies may expand within existing facilities, and licensing timelines may differ from implementation and operation. The sustainability of residential demand is also linked to the economy’s ability to provide incomes and job opportunities.

Property ownership transactions by non-Jordanians add another perspective to the analysis. Their number increased during the first eight months of 2026 by 7% compared to the corresponding period in 2025, to 1,515 transactions, while their estimated value increased by only 1% to 147.11 million dinars. Growth in numbers being faster than value means a decline in the average estimated value per transaction, but it does not prove a price decline, given the possibility of changes in property types, areas, and locations.

Iraqi nationality led property ownership transactions during the first eight months of 2026 with 373 properties, followed by Saudi with 195 and Syrian with 181. However, the buyer’s nationality does not determine the economic impact of the transaction; purchasing an existing property differs from financing a new project, and the estimated value of ownership does not necessarily equal funds transferred from abroad.

In the legislative context, the amended Real Property Ownership Law No. 17 of 2026 was issued in September, to take effect 30 days after its publication. Facilitations for non-Jordanian housing ownership outside planning regulations were among its declared objectives, but their economic evaluation requires monitoring what they add in actual construction and use, alongside property transfer transactions.

Geographically, the Central Region’s share remained at 73% of licensed areas during the first seven months of 2026, as it was in the corresponding period of 2025. Its stability indicates the continuation of concentrated urban activity, which raises the importance of linking construction opportunities in governorates to the availability of jobs, services, and purchasing power.

Therefore, the issue does not lie solely in the rise in permits, but rather in the type of activity they measure. Economic analysis is complete only when we know how much converts into executed constructions, utilized assets, added value, and job opportunities, while distinguishing between licensing of what exists and production of what is new.