The local arm of the Chicago-based property consulting firm Jones Lang LaSalle said Jakarta’s residential market has yet to recover from the global economic downturn, with figures for property sales and leases down dramatically compared to last year.
“Sales of apartments are still down, while new unit leasing also declined during the first half of this year,” Anton Sitorus, head of research at PT Jones Lang LaSalle Indonesia, said on Wednesday.
Local investors and end-users, the dominant force behind the residential market, were less impacted by external economic factors, but more affected by interest rates and the local market situation, he said.
“There will be buyers holding back due to the national elections, while the change in interest rates also contributes to a buyer’s decision,” said Vivin Harsanto, head of Jones Lang LaSalle Indonesia’s strategic consulting department.
Sales of apartments fell to about 1,500 units during the six months through June, less than half of the estimated 3,300 units sold in the same period last year.
The number of new apartment rentals in the city also fell sharply to 260 units in the period, a decline of 48 percent compared with about 500 units in the first half last year.
Vivin said the apartment property market was more elastic than the office and retail property markets.
This means that the market is easily impacted by events which cause quick drops or increases in unit sales.
“Sales or lease cancellations of apartments are immediate or happen a month later, unlike retail or office market tenants, who must endure the decline of customers until their lease terms expire,” she added.
Anton said the residential property market was beginning to show some recent signs of recovery, although this was not reflected in data from the first half of the year.
“We’ve seen build-up in buyer interest. Maybe it will manifest itself later this year or even next year,” he said.
Anton added that he did not see much decline in the number of overall apartment tenants, but projected what he referred to as “down-the-ladder” movement for renters.
“Higher-end tenants may have switched to lower-priced apartments, as the buyer’s market offers ample opportunities for lower-priced but larger-sized apartments,” he said.
On the future outlook, Anton is projecting that the residential market will take until the end of this year to recover, with tangible results “probably more toward next year or even 2011.”