Property market dampened by numerous factors<\/p>\n
JAKARTA (JP): An international property consultant firm claims
\nthat while high foreign investment approvals have propelled
\ndemand for property in Indonesia, a number of other factors have
\ndampened the industry's prospects.<\/p>\n
PT Colliers Jardine Indonesia blames this year's relatively
\nsubdued performance of the property industry on rising interest
\nrates, the quick appreciation of the Japanese yen, a credit
\nsqueeze on property loans to developers and consumers as well as
\nnew luxury taxes on houses, apartments and condominiums above 400
\nsquare meters.<\/p>\n
In the April edition of its quarterly Jakarta Property Market
\nReview, the company said the apartment market is the most
\naffected sector and suggested that this is the best time for
\nbuying.<\/p>\n
"The slowdown of sales and fierce competition have pushed
\ndevelopers to offer substantial discounts and more attractive
\nfinancing schemes. Prices are now down and there is a choice of
\nunits," the review quoted the company's managing director, Peter
\nA. Collins, as saying.<\/p>\n
The review recorded a slowdown in middle sector apartment
\nsales since the end of last year. The drop in sales occurred
\nbecause over 4,000 units entered the market in the fourth quarter
\nof last year.<\/p>\n
"Currently, Jakarta enjoys some of the lowest prices in South
\nEast Asia, benefits from some of the highest rentals and shows
\nsome of the best yields for prime residential units," Collins
\nsaid.<\/p>\n
He said, however, the prices of top-end luxury strata title
\napartments are still relatively expensive, ranging between
\nUS$2,500 and $3,700 per square meter.<\/p>\n
Collins noted that last year's investment approvals of US$23.7
\nbillion, almost three times higher than the previous year, have
\ndriven demand for office spaces although office space supply
\nremains high due to the completion of a number of projects.<\/p>\n
"We expect more enquiries from foreign companies," Collins
\nsaid.<\/p>\n
As of last March, total office space was recorded at 2.3
\nmillion square meters. It is estimated that 456,162 square meters
\nmore will come on stream during the rest of this year, with a
\nfurther 412,239 square meters next year.<\/p>\n
Supply<\/p>\n
"The next three years will see a disproportionately large
\namount of supply coming on stream causing a rise in vacancy
\nlevels and a general downward pressure on rentals," Collins said.<\/p>\n
Current rentals range between US$10 and $15 per square meter
\nper month, continuing the downward trend of the past five years.
\nThis figure is expected to stay still until the next quarter of
\nthis year.<\/p>\n
The demand for industrial estates has been also driven by the
\nhigh volume of foreign investment. Enquiries for industrial land
\nand factories for rent have risen 50 percent during the first
\nquarter of this year.<\/p>\n
"The first positive sign signaling the resurgence of demand
\nfor industrial estates is a hike in sale prices of industrial
\nland," Collins said.<\/p>\n
Selling prices of established industrial estates have
\nincreased by about 30 percent to 60 percent, ranging from US$162
\nto $182 per square meter, while the prices for the lower class
\nestates remain quite the same, ranging from $40 to $55 per square
\nmeter.<\/p>\n
In the hotel market, the review recorded that three-star
\nhotels were the most active category in the market during the
\nfirst quarter of this year.<\/p>\n
As of last March, the stock of star-rated hotels in the
\ngreater Jakarta area is 12,467 rooms. It is estimated that a
\ntotal supply of 3,190 new rooms, 60 percent of which will be
\nfour-star rated, will enter the market.<\/p>\n
"Fiercer competition is expected from the four-star hotels,"
\nCollins said, adding that last year's occupancy rate was recorded
\nat 65 percent with an average rate of US$105 to $150 for most
\nfive-star hotels.<\/p>\n
Out of all property sectors, the retail sector remains most
\nattractive. Middle class consumer growth is the primary force
\ndriving the development of over 22 shopping centers estimated to
\ncomplete by the end of next year.<\/p>\n
Current rentals for prime shopping centers range between $40
\nand $120 per square meter per month, with service charges of
\nbetween $7.50 and $9. Rentals in regional malls range from $25 to
\n$80. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/property-market-dampened-by-numerous-factors-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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