Many developers will go bankrupt next year: PSPI<\/p>\n
JAKARTA (JP): About 625, or 25 percent of the country's 2,500
\ndevelopers, will go bankrupt next year because of their
\nliabilities, legal problems and the weakening market, property
\nconsultancy PSPI Research predicted yesterday.<\/p>\n
\"The bankruptcies will be caused mostly by legal problems and
\nproblem loans,\" said PSPI Research chairman Panangian
\nSimanungkalit.<\/p>\n
He said the legal problems related to the government's recent
\ndecision not to issue anymore land clearing licenses to
\ndevelopers in Greater Jakarta, where most of the 625 developers
\nwere based.<\/p>\n
About 60 percent of the companies expected to go bankrupt were
\nsmall or medium size developers, he said.<\/p>\n
Panangian said problem loans in the property sector would
\nincrease 6.67 percent to Rp 5.60 trillion (US$2.41 billion) next
\nyear from Rp 5.25 trillion this year.<\/p>\n
He said developers could not rely on financial markets next
\nyear to fund their projects.<\/p>\n
\"Banks are likely to reduce their property credits by 41.67
\npercent to Rp 7 trillion next year, from about Rp 12 trillion
\nthis year,\" he said.<\/p>\n
He said only developers with sufficient capital and good
\nmanagement and staff would survive.<\/p>\n
\"The property market will weaken next year because of weak
\ndemand and oversupply,\" he said, adding that the weakening market
\nwould partly result from perceived political uncertainty.<\/p>\n
He said house sales would drop 12 percent to 132,000 units
\nnext year.<\/p>\n
Sales of middle-class houses -- with prices ranging from Rp 75
\nmillion to Rp 150 million -- would drop 10 percent and
\ntransaction values would decline 12 percent.<\/p>\n
Sales of high-class houses -- costing more than Rp 150 million
\n-- would drop 15 percent and transaction values decrease 20
\npercent.<\/p>\n
He said demand for houses would drop because most speculators,
\nwho dominated the market, would out play the market.<\/p>\n
In Greater Jakarta, there would be an oversupply of apartments
\nand town houses, with 6,121 units on the market next year,
\ndespite increased demand.<\/p>\n
Apartments and town house rents would fall 26.67 percent to
\n$22 a square meter a month next year, from $30 this year.<\/p>\n
Condominiums<\/p>\n
PSPI said sales of condominiums in Greater Jakarta would drop
\n25 percentage points to 60 percent next year, with 17,615
\ncondominiums on the market.<\/p>\n
There would be an oversupply of shopping centers in Greater
\nJakarta, despite demand increasing, with 1.87 million square
\nmeters of retail space next year, but occupancy rates would drop
\nfrom 89 percent this year to 86 percent next year.<\/p>\n
PSPI said retail rents would fall from $75 a square meter a
\nmonth this year to $71 a square meter next year.<\/p>\n
But the supply of office space in Greater Jakarta would drop
\namid rising demand. Office rents would increase from $13.5 a
\nsquare meter a month this year to $15 a square meter a month next
\nyear, PSPI said.<\/p>\n
Office supply is expected to total 2.65 million square meters
\nnext year, while occupancy rates are to rise two percentage
\npoints to 92 percent next year. (bnt)<\/p>",
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"sponsor_url": "https:\/\/okusiassociates.com"
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