Property pricing in Jordan currently relies on location, demand, and urban development expectations rather than long-term environmental risks. Dr. Hudhayfa Al-Qarala, Professor of Financial Econometrics at the Faculty of Business at Mutah University, argues that current market assessments overlook emerging climate pressures. Dr. Hudhayfa Al-Qarala states that property pricing in Jordan currently relies on location, demand, and urban development expectations rather than long-term environmental risks. He maintains that a shift in valuation models is necessary to reflect the realities of environmental change. "A property’s true value is determined not only by its location, size and currently available services, but also by its ability to retain these advantages in the future," Dr. Hudhayfa Al-Qarala said. This disconnect between traditional pricing metrics and potential environmental hazards suggests that the local real estate market has yet to fully account for the long-term impact of climate change on asset stability.
The methodology used by investors and developers often prioritizes immediate returns, frequently ignoring the environmental vulnerabilities that could dictate the future utility of land. As climate patterns shift, the reliance on historical performance data may become an insufficient metric for determining the long-term financial health of real estate assets. The integration of environmental risk into financial modeling is, according to Dr. Hudhayfa Al-Qarala, a prerequisite for maintaining market transparency and investor confidence in the face of changing conditions.
Water Scarcity and Property
The National Water Strategy 2023–2040 reports that per capita renewable freshwater resources in Jordan reached approximately 61 cubic metres annually in 2021. This level of availability informs broader discussions regarding the long-term viability of land and infrastructure development across the country. The scarcity of water resources serves as a critical indicator for the sustainability of residential, commercial, and industrial projects, as the availability of this resource directly influences the operational costs and long-term maintenance requirements of physical assets.
Hisham Al-Natour, president of the Jordanian Association of Real Estate Appraisers, identifies more than 400 licensed property appraisers currently operating in Jordan. Hisham Al-Natour notes that there are more than 400 licensed property appraisers in Jordan. These professionals hold responsibility for assessing assets, yet Hisham Al-Natour argues that the current absence of standardized data regarding environmental hazards hampers their ability to issue accurate valuations. Without a centralized framework, individual appraisers are left to navigate complex environmental variables without the benefit of consistent, verified datasets.
To address this, Hisham Al-Natour advocates for the establishment of a National Observatory for Real Estate Values and Environmental Changes. He posits that such a body could provide the necessary data to integrate environmental factors into the appraisal process. The creation of such an observatory would facilitate a more strong understanding of how physical environmental risks translate into financial liabilities for property owners. Regarding the urgency of this integration, Hisham Al-Natour stated: "Failing to refer to climate risk maps would constitute professional negligence, particularly given discussions surrounding flash-flood risk maps in the governorates of Amman and Zarqa, heat stress, water scarcity and their impact on agricultural and tourism projects in Azraq and the Dead Sea, as well as soil degradation." By formalizing the inclusion of these risks, the industry could move toward a more resilient valuation structure that accounts for the environmental realities facing the kingdom.
