Beyond Building Permits .. When Does Real Estate Become Economic Value
In his article Economic Reading of Building Permits, published in Al-Ghad on 26 September 2026, economist Salameh Al-Daraawi raised an important question about the rise in licensed floor area. Does this increase point to new construction, or does part of it relate to the licensing of buildings that already exist? This leads to a broader question: when does a permit move beyond being an official transaction and become a property that supports production and creates jobs?
The data show that total licensed floor area rose by 4.7% during the first seven months of 2026, reaching 5.84 million square metres. However, the area licensed for new buildings and extensions fell by 2.9%, while existing buildings accounted for 41.6% of the total. The rise in the overall figure does not therefore mean that construction activity expanded at the same rate, because a large share of the permits relates to buildings that already exist.
Distinguishing new construction from existing buildings is necessary, but it is not enough to show the economic effect. Receiving a permit does not mean that work has started. Starting construction does not guarantee completion, and completing a property does not mean that it is being used. A project may stop because of limited financing, weak demand or higher costs. Its real value appears when it becomes an occupied home, a productive factory, an operating shop or an office that provides a service and creates a job.
This issue becomes more important when residential floor area rises by 10.7% and reaches 81.6% of the total, while non-residential floor area falls by 15.7%. The rise in residential space may reflect future demand or the regularisation of existing buildings, but it does not prove that the market is strong. Demand still needs sufficient income and suitable financing. The fall in non-residential space also deserves attention because it is more clearly linked to business expansion and additional productive capacity.
A simple real-estate asset activation index could help. Instead of counting permits alone, it would track what happened after each permit was issued. It would measure the share of projects that started, the share completed on time and the number of properties that entered actual use. It could also track the jobs created, financing received, distribution across governorates, and commercial and industrial properties that began operating after completion. The sector would then be judged by what reached the stage of work and production, not only by permits and recorded floor area.
This does not mean that licensing existing buildings has no economic value. A permit may allow a property to be sold, mortgaged, repurposed or connected to public services. It may turn a property that is difficult to use or transfer into an asset that can be sold, financed or occupied. Measuring the effect, however, requires following what happens next. Was ownership transferred? Did the owner receive financing? Was the property actually used, or did it remain closed without making an economic contribution?
The index could be built by linking data from municipalities, the Greater Amman Municipality, the Department of Lands and Survey, banks, the Social Security Corporation and the Department of Statistics. Each institution holds one part of the picture. The permit shows authorisation, financing shows the ability to proceed, construction data show progress, occupancy shows actual use, and jobs and value added show the economic result. Bringing these parts together would also help identify stalled projects early and reveal which areas need additional financing, services or infrastructure.
The question would then move beyond how many square metres were licensed. It would also ask how many became usable, how many jobs they created, and how much income and value they added. This approach would help policymakers distinguish a rise in administrative transactions from real economic expansion and direct financing and services towards the most useful projects. Economist Salameh Al-Daraawi deserves thanks for raising this issue. An economy grows not through what is licensed alone, but through what is built, used and made productive.
In his article Economic Reading of Building Permits, published in Al-Ghad on 26 September 2026, economist Salameh Al-Daraawi raised an important question about the rise in licensed floor area. Does this increase point to new construction, or does part of it relate to the licensing of buildings that already exist? This leads to a broader question: when does a permit move beyond being an official transaction and become a property that supports production and creates jobs?
The data show that total licensed floor area rose by 4.7% during the first seven months of 2026, reaching 5.84 million square metres. However, the area licensed for new buildings and extensions fell by 2.9%, while existing buildings accounted for 41.6% of the total. The rise in the overall figure does not therefore mean that construction activity expanded at the same rate, because a large share of the permits relates to buildings that already exist.
Distinguishing new construction from existing buildings is necessary, but it is not enough to show the economic effect. Receiving a permit does not mean that work has started. Starting construction does not guarantee completion, and completing a property does not mean that it is being used. A project may stop because of limited financing, weak demand or higher costs. Its real value appears when it becomes an occupied home, a productive factory, an operating shop or an office that provides a service and creates a job.
This issue becomes more important when residential floor area rises by 10.7% and reaches 81.6% of the total, while non-residential floor area falls by 15.7%. The rise in residential space may reflect future demand or the regularisation of existing buildings, but it does not prove that the market is strong. Demand still needs sufficient income and suitable financing. The fall in non-residential space also deserves attention because it is more clearly linked to business expansion and additional productive capacity.
A simple real-estate asset activation index could help. Instead of counting permits alone, it would track what happened after each permit was issued. It would measure the share of projects that started, the share completed on time and the number of properties that entered actual use. It could also track the jobs created, financing received, distribution across governorates, and commercial and industrial properties that began operating after completion. The sector would then be judged by what reached the stage of work and production, not only by permits and recorded floor area.
This does not mean that licensing existing buildings has no economic value. A permit may allow a property to be sold, mortgaged, repurposed or connected to public services. It may turn a property that is difficult to use or transfer into an asset that can be sold, financed or occupied. Measuring the effect, however, requires following what happens next. Was ownership transferred? Did the owner receive financing? Was the property actually used, or did it remain closed without making an economic contribution?
The index could be built by linking data from municipalities, the Greater Amman Municipality, the Department of Lands and Survey, banks, the Social Security Corporation and the Department of Statistics. Each institution holds one part of the picture. The permit shows authorisation, financing shows the ability to proceed, construction data show progress, occupancy shows actual use, and jobs and value added show the economic result. Bringing these parts together would also help identify stalled projects early and reveal which areas need additional financing, services or infrastructure.
The question would then move beyond how many square metres were licensed. It would also ask how many became usable, how many jobs they created, and how much income and value they added. This approach would help policymakers distinguish a rise in administrative transactions from real economic expansion and direct financing and services towards the most useful projects. Economist Salameh Al-Daraawi deserves thanks for raising this issue. An economy grows not through what is licensed alone, but through what is built, used and made productive.
In his article Economic Reading of Building Permits, published in Al-Ghad on 26 September 2026, economist Salameh Al-Daraawi raised an important question about the rise in licensed floor area. Does this increase point to new construction, or does part of it relate to the licensing of buildings that already exist? This leads to a broader question: when does a permit move beyond being an official transaction and become a property that supports production and creates jobs?
The data show that total licensed floor area rose by 4.7% during the first seven months of 2026, reaching 5.84 million square metres. However, the area licensed for new buildings and extensions fell by 2.9%, while existing buildings accounted for 41.6% of the total. The rise in the overall figure does not therefore mean that construction activity expanded at the same rate, because a large share of the permits relates to buildings that already exist.
Distinguishing new construction from existing buildings is necessary, but it is not enough to show the economic effect. Receiving a permit does not mean that work has started. Starting construction does not guarantee completion, and completing a property does not mean that it is being used. A project may stop because of limited financing, weak demand or higher costs. Its real value appears when it becomes an occupied home, a productive factory, an operating shop or an office that provides a service and creates a job.
This issue becomes more important when residential floor area rises by 10.7% and reaches 81.6% of the total, while non-residential floor area falls by 15.7%. The rise in residential space may reflect future demand or the regularisation of existing buildings, but it does not prove that the market is strong. Demand still needs sufficient income and suitable financing. The fall in non-residential space also deserves attention because it is more clearly linked to business expansion and additional productive capacity.
A simple real-estate asset activation index could help. Instead of counting permits alone, it would track what happened after each permit was issued. It would measure the share of projects that started, the share completed on time and the number of properties that entered actual use. It could also track the jobs created, financing received, distribution across governorates, and commercial and industrial properties that began operating after completion. The sector would then be judged by what reached the stage of work and production, not only by permits and recorded floor area.
This does not mean that licensing existing buildings has no economic value. A permit may allow a property to be sold, mortgaged, repurposed or connected to public services. It may turn a property that is difficult to use or transfer into an asset that can be sold, financed or occupied. Measuring the effect, however, requires following what happens next. Was ownership transferred? Did the owner receive financing? Was the property actually used, or did it remain closed without making an economic contribution?
The index could be built by linking data from municipalities, the Greater Amman Municipality, the Department of Lands and Survey, banks, the Social Security Corporation and the Department of Statistics. Each institution holds one part of the picture. The permit shows authorisation, financing shows the ability to proceed, construction data show progress, occupancy shows actual use, and jobs and value added show the economic result. Bringing these parts together would also help identify stalled projects early and reveal which areas need additional financing, services or infrastructure.
The question would then move beyond how many square metres were licensed. It would also ask how many became usable, how many jobs they created, and how much income and value they added. This approach would help policymakers distinguish a rise in administrative transactions from real economic expansion and direct financing and services towards the most useful projects. Economist Salameh Al-Daraawi deserves thanks for raising this issue. An economy grows not through what is licensed alone, but through what is built, used and made productive.
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Beyond Building Permits .. When Does Real Estate Become Economic Value
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