Developers complain about land brokerage<\/p>\n
JAKARTA (JP): The association of real estate developers voiced
\ntheir complaints yesterday about land brokers who dictate their
\nprices to developers, whose business tend to suffer as a result.<\/p>\n
\"This has become a serious problem for the construction
\nbusiness,\" chairman of Real Estate Indonesia (REI) Enggartiasto
\nLukita told a hearing with Commission V of the House of
\nRepresentatives here.<\/p>\n
Speculative actions, which are spreading all over the country,
\ncould lead to a high-cost construction sector if no measures are
\ntaken.<\/p>\n
\"Very often they forcibly ask developers to pay for the land
\nthey control at their set prices. Such a practice tends to
\nprotract the development process of public housing,\" he said.<\/p>\n
President of Lippo Cikarang, Herman Latief, seconded the view,
\nsaying that his company also faces speculators in land
\nclearances, including Lippo Cikarang, an industrial estate near
\nBekasi which was visited by Commission members yesterday.<\/p>\n
Reliable sources told The Jakarta Post that many developers
\nare facing similar problems in constructing their projects on
\nJava and other islands.<\/p>\n
\"They move very quickly. If there is a construction project in
\nan area, they will move and buy the land there from local
\nresidents at very low prices. And then they sell it to developers
\nat very high prices,\" said a source.<\/p>\n
They added that such tactics will not only harm developers but
\nalso the public. Many of the land owners cannot get market prices
\nfor their land.<\/p>\n
Due to high land prices, developers have to sell the houses
\nthey build at unusually high price levels.<\/p>\n
REI, grouping 2,110 developers from all over the country, 900
\nof which are based in Jakarta, is facing a slump in the
\nconstruction business. The demand for houses is also weak.<\/p>\n
More and more banks are reluctant to provide credits to the
\nproperty sector. \"I think banks have now become choosy in giving
\ntheir credits to the property sector. They are likely to give
\ncredits just for construction and not for land clearances,\" said
\nHerman.<\/p>\n
Furthermore,the government has appealed to all banks to limit
\ntheir credit to the property sector.<\/p>\n
Credit to the property sector has reportedly reached a warning
\nlevel and many of them could turn into problem loans. In 1993,
\ncredit levels to the sector were at Rp 21.8 trillion (US$9.49
\nbillion) but as of August 1995, the level had reached Rp 41
\ntrillion.<\/p>\n
Such problems are likely to be discussed at REI's national
\nconference from Dec. 11-14. (13)<\/p>",
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