Apartment prospects rely on expatriates<\/p>\n
JAKARTA (JP): Future demand for apartments in Jakarta depends
\non the return of expatriates in response to the expected influx
\nof foreign investment, a property consultant says.<\/p>\n
International property consultant FPD Savills says that demand
\nfor apartments will grow in line with economic recovery, which
\nwill bring foreign investors to Jakarta.<\/p>\n
In its fourth quarter report, FPD Savills estimates that it
\nmight take from two to three years for the number of expatriates
\nto return to the precrisis level.<\/p>\n
The consultant predicts this year's occupancy rate for
\nupmarket apartments in the central business district (CBD) will
\ngrow to 85 percent from 77 percent last year.<\/p>\n
There will be new upmarket apartments available starting from
\n2002, with an annual level of approximately 238 new apartments,
\nSavills' report says.<\/p>\n
Occupancy rates of middle-class apartments will also grow from
\nlast year's 56 percent. However, the increase might not reach 65
\npercent for two or three years.<\/p>\n
Savills attributed the low occupancy forecast to the
\noversupply of middle-class strata title apartments, adding that
\nmore new middle-class apartments could become available.<\/p>\n
Upmarket CBD apartment rentals are expected to decrease
\nslightly during 2000 to a level of US$15 per square meter per
\nmonth from $16.5 in the fourth quarter of 1999. The decline will
\nfollow the weak demand and new strata title supply that was or
\nwill be completed in 1999 and 2000.<\/p>\n
Middle-class CBD rentals will also bottom out in 2000 to a
\nlevel of $10 per square meter per month, following similar weak
\ndemand and additional supply, the report says.<\/p>\n
According to Savills, apartment rentals will increase by
\napproximately 20 percent during 2001.<\/p>\n
The property consultant predicts a slight increase in demand
\nfor houses despite an estimated hike of 5 percent to 10 percent
\nin land prices and possibly 5 percent in building prices.<\/p>\n
Savills cited the resumption of extending home loans as a
\nfactor behind the estimated growth in house demand.<\/p>\n
The consultant reported that many considered houses to be a
\nsafer investment when the rupiah weakened against the U.S. dollar
\nto more than Rp 10,000 at the peak of the economic crisis in
\nearly 1998.<\/p>\n
However, after deposit rates began to increase in the first
\nquarter of 1998, reaching 50 percent and above, consumers chose
\nto put their money in bank deposits which led to limited property
\nsales until mid 1999.<\/p>\n
After the election of the new government and during the third
\nand fourth quarters of 1999, sales began to resume growth
\nslightly, the report says.<\/p>\n
The improved availability of home loans and the drop in
\ninterest rates on deposits to 12 percent also contributed to the
\nimprovement in property sales.<\/p>\n
Leading the recovery of the property sector, however, is
\nretail premises, Savills says.<\/p>\n
Savills says the occupancy rate of retail property may reach
\n99 percent by 2001 as it already reached 95 percent in the fourth
\nquarter of 1999.<\/p>\n
Another property consultant, Procon Indah\/Jones Lang LaSalle,
\nis also placing confidence in retail property, saying that retail
\nspace has showed significant improvement in 1999.<\/p>\n
Procon Indah attributes the boost in retail property
\nrental\/sales to the presence of hypermarkets, on which people
\nlargely depend on for daily supplies. (03)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/apartment-prospects-rely-on-expatriates-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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