Bandung, West Java (ANTARA News) - A company president director said the prospect of property business in Indonesia is brighter and the business is projected to flourish with growth expected to be around 20 to 30 percent.
"The housing demand is still quite high and on the other hand the economy also keeps improving and the rate of housing credits is reaching the lowest. The property business is predicted to be booming in 2011," the president director and chief executive officer of PT Bakrieland Development Tbk., Hiramsyah S Thoib, said on the sidelines of a meeting of alumni of the Bandung Institute of Technology (ITB) of 1981 Class here on Saturday.
He said the housing demand in Indonesia reaches eight million units while the public purchasing power keeps increasing driven by aggressive banking operations in the property sector after the rate of housing credits (KPR) dropped to between 10 and 11 percent.
There are even banks that have set their KPR rates at below 10 percent giving a fresh atmosphere to increase sales of vertical as well horizontal housing units, he said.
"Clearly some sectors have grown such as motorbike market and car purchases in the past five years and we believe in 2011 the turn will be for property industry," he said.
Hiramsyah said the growth of the property sector in 2010 was quite positive although it was still below 20 percent. However with the increasing indicators of public economic capacity it was not impossible that the industry could achieve 20 to 30 percent growth in 2011.
The present condition of property industry has not been affected much by the monetary crisis due to a shift in capital power they used to fund projects, he said.
"The pressure from the economic crisis in 2008 on the property sector was not too big because property developers have been using their own funds unlike in 1988 crisis when the industry used much funds from banks," he said.
The growth in the housing sector also covers common houses and apartments. The government`s policy that has eased the requirements and lowered the KPR interest rates has helped give a boost.
"The government`s policy that supports especially the growth of flats has helped boost the industry despite obstables of inter-sectoral synchronization and coordination and central-regional policy difference," he said.
In 2009 he said the property industry still took a wait and see stance but as the impact of the global crisis was not too strong the growth of the industry has become positive.
On the other hand in 2011 prices certainly would rise significantly although it is predicted not to be above 10 percent, he said.
With regard to flats (rusunami) he said his company plans to build three towers in East Jakarta with each tower to have 300 units.
He said his company had already planned the project cost for 2011 of between Rp2 trillion to Rp2.5 trillion, which is higher than last year.(*)