Apartments everywhere, but few tenants<\/p>\n
Abdul Khalik, The Jakarta Post, Jakarta<\/p>\n
New apartments and condominiums continue to flood the capital's
\nmarket despite the fact only few of them are being occupied. What
\nprompts developers to continue to build new apartments and
\ncondos? The following is the first of a series of articles on
\napartments and condominiums in the capital.<\/p>\n
Driving past apartment and condominium buildings in the capital
\nin the evening, you would immediately notice that most of units
\nwere dark, suggesting they were not being occupied.<\/p>\n
But, ask the marketing offices or developers of the apartments
\nand condominiums, they would likely suggest that their apartments
\nand condominiums were sold out, or at the very least 85 or 90
\npercent sold.<\/p>\n
But where are the tenants?<\/p>\n
Research analyst Hadi Syamsudin of property analyst firm
\nColdwell Banker Commercial Indonesia told The Jakarta Post that a
\ngreat majority of Indonesians preferred staying in residential
\ncomplexes to living in apartments and condominiums, which are
\noften identified with individualistic lifestyles.<\/p>\n
He added that Jakarta families were just not yet accustomed to
\nliving in apartments and condominiums.<\/p>\n
That, however, does not seem to prevent property developers
\nfrom building new apartments and condominiums in the capital,
\na city of around 10 million.<\/p>\n
Property developers, including Agung Podomoro, Artha Graha and
\nGapura Prima, continue to build condominiums and apartments in
\nthe capital, adding to the existing stock of around 45,000 units
\nin April 2005.<\/p>\n
Expected to come on stream in the second quarter of 2005 are
\n1,718 condominiums from several projects in Central and South
\nJakarta, including the Sudirman Mansions, SCBD suites, Bellazzio
\nTower 1, Poin Square Apartments, Airlangga Apartments, Bellagio
\nMansions and Bellagio Residence, while 168 new apartments are
\nexpected from Aston Rasuna and Marriott Executive Apartments.<\/p>\n
Recent research from Coldwell suggested that many Jakartans
\nbuy apartments and condominiums either to gain profit when they
\nresell the units, or to rent them out, rather than to use them as
\nresidences.<\/p>\n
\"Most apartment and condominium buyers want to rent out their
\nunits to expatriates or local executives and professionals, while
\nsome of them buy the units to gain price margins when they resell
\nthem. So, most buyers have no intention of staying in the
\napartments and condominiums,\" Hadi said.<\/p>\n
According to Coldwell, to April 2005 all apartments and
\ncondominiums coming onto the market had been sold to between 85
\npercent and 95 percent of the total 45,000 units in the capital.<\/p>\n
\"Many Jakartans have the purchasing power to buy several
\napartments and condominiums, and judging from the sales level of
\ncondominiums and apartments, we seem to have many rich people in
\nJakarta. Many of them even buy two or more rooms in each
\nproject,\" Hadi said.<\/p>\n
Current average selling price of condominiums in 2005 is Rp
\n8.31 million per square meter (sqm), an increase of 5.19 percent
\nover the level at the end of 2004, while the average apartment
\nselling price is Rp 6.84 million per sqm, up by 3.95 percent over
\nthe previous semester.<\/p>\n
Rental prices remain relatively stable, ranging from US$2.84
\nto US$27.06 per sqm per month, a slight increase of some 0.72
\npercent over that of the end of last year.<\/p>\n
Beside expatriates, the target market of people who stay in
\napartments or condominiums are young executives or young couples
\nwho have just arrived from abroad, and the children of the
\nwealthy who want to be independent.<\/p>\n
High margins are also one of the driving forces why developers
\ncontinue to build apartments and condominiums, as just 50 percent
\nsales means that developers will recover their total investment.<\/p>\n
Many developers finance their projects with investments from
\ninternal capital and individual investors as banks are still
\nunwilling to give out large loans.<\/p>\n
\"Around 70 percent to 80 percent of money invested in the
\nprojects comes from private individual funds, as banks are still
\nreluctant to channel loans. People want to invest in a project
\nfor much higher gain,\" Hadi said.<\/p>\n
Developers also often used down-payments from buyers to begin
\nconstruction if the developers had acquired the lands, he said.<\/p>\n
Hadi predicted that developers would keep on building new
\napartments and condominiums until 2007 when the market was
\nexpected to be saturated.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/apartments-everywhere-but-few-tenants-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}