Housing sector is predicted to increase by 12% this year<\/p>\n
Sari P. Setiogi
\nThe Jakarta Post
\nJakarta<\/p>\n
The housing sector in the country is predicted to grow by 12
\npercent this year, with 130,000 houses estimated to be sold on
\nthe market, according to an expert.<\/p>\n
"Last year, about 115,000 units were sold, as compared to
\n98,000 units in 2001. This year, the most demand will be for
\nhouses in the medium price range, from Rp 150 million (US$16,000)
\nand up," director of the Indonesian Property Study Center (PSPI)
\nPanangian Simanungkalit told The Jakarta Post on Monday.<\/p>\n
He did not express optimism about low-cost housing projects,
\nexplaining that the government was not serious in providing
\nsubsidies.<\/p>\n
"Last year, the government set a target to provide Rp 250
\nbillion in subsidies to help low-income people purchase low-cost
\nhouses, but the target was not reached. This year, its target is
\nabout Rp 30 billion," he said.<\/p>\n
According to him, the developing areas for housing are in
\nSerpong and Karawaci in Tangerang, West Bekasi, Cibubur and
\nCileungsi and areas close to toll road gates in Bogor.<\/p>\n
"The most rapid development is occurring in areas between
\nCibubur and Cileungsi," added Panangian, who is also the property
\nconsultant for Indonesian Bank Restructuring Agency (BPPN).<\/p>\n
"The property business is now glowing, particularly for the
\nmiddle to lower cost segment, like shop houses which fit the need
\nof small and medium enterprises, or retail outlets at malls."<\/p>\n
He even stated that it was now the right time to be involved
\nin the property business. "While bank interest rates are
\ndeclining and inflation is high, the capital which flew out of
\nthe country at the start of the economic crisis is currently
\nreturning and is targeted at the property business," he said.<\/p>\n
But he acknowledged that high-end properties were no longer
\nattractive. "Office buildings, industrial sites and luxury
\napartments are now losing their appeal. Most property segments
\nthat usually rely on foreign investment are now hard to develop,"
\nhe said.<\/p>\n
In the meantime, commenting on the possibility of over-supply
\nin retail property business, Panangian said that many retail
\nbuildings had been and were being constructed and an over-supply
\nmight happen in 2005. The additional supply would only cause a
\nprice adjustment, which was both natural and positive, according
\nto him.<\/p>\n
He did not agree that in spite of a possible over-supply,
\nretail buildings would not be empty.<\/p>\n
"Most Indonesians still shop at traditional markets. The ratio
\nof people compared to shopping center areas is still very small,"
\nhe said. Panangian claimed that in Greater Jakarta alone there
\nare 32 million citizens, while shopping centers cover only about
\n2.2 million square meters.<\/p>\n
He was optimistic that the number of people shopping at malls
\nand other shopping centers would keep increasing.<\/p>",
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