Property sector 'on road to recovery'<\/p>\n
JAKARTA (JP): The property sector, especially housing, will
\nrecover to its precrisis level next year as sales this year are
\npredicted to double from 1999, leading property developer Ciputra
\nsaid on Wednesday.<\/p>\n
Steadily falling bank interest rates are fueling a robust
\nincrease in property sales this year, Ciputra said on the
\nsidelines of a seminar on e-commerce.<\/p>\n
\"With interest rates already falling to as low as 12 percent,
\nan increasing number of people now prefer to buy houses.\"<\/p>\n
He said that even sales of upmarket housing with prices of Rp
\n1 billion (US$120,000) or higher were rising slowly but steadily.<\/p>\n
Ciputra, whose property interests span housing, shopping
\ncenters, hotels and golf courses, said his company's sales peaked
\nin 1997.<\/p>\n
The regionwide economic contagion struck the country in August
\n1997 but its full effects were only felt in 1998 when the economy
\ncontracted almost 14 percent.<\/p>\n
The property sector collapsed in 1998, leading many firms to
\ndefault on their debt payments and forcing banks to transfer the
\nhandling of heavily indebted developers to the Indonesian Bank
\nRestructuring Agency (IBRA).<\/p>\n
Ciputra said that after two years of languishing in the
\ndoldrums, the property market was bullish amid strengthening
\nconsumer confidence.<\/p>\n
\"Many people who held off for two years on plans to purchase
\nhousing and invested their savings mostly in time deposits now
\nfeel it is time to enter the property market,\" he said.<\/p>\n
Ciputra predicted that demand for small houses would grow
\nconsiderably higher than medium and upmarket ones.<\/p>\n
He said house ownership loans, besides car loans, were now the
\nmost popular among most of the banks which resumed lending.
\nMortgage rates also have declined to as low as 20 percent.<\/p>\n
Another property developer, Kosmian Pudjiadi of the
\nAssociation of Indonesian Real Estate Companies (REI), shared
\nCiputra's upbeat forecast, saying the property market showed a
\nstrong recovery since early this year.<\/p>\n
Kosmian said the housing market also was reinvigorated by the
\ndecision of developers to desist from raising prices from
\nprecrisis levels while the market was without new supply.<\/p>\n
\"The market expansion would be even faster if the government
\ncould speed up the restructuring of developers' debts,\" he added.<\/p>\n
Although property expert Panangian Simanungkalit was similarly
\npositive about the housing market, he expected full recovery only
\nby 2004.<\/p>\n
Housing sales -- the main indicator of the property industry
\n-- would increase to some 90,000 units this year from about
\n55,000 units last year, he said.<\/p>\n
\"The housing market peaked in 1997 when sales reached 220,000
\nunits. But it would take another three years before the market
\nwill fully pick up to the 1997 level.\"<\/p>\n
He said the government needed to restructure the property
\nindustry and control new supplies by restricting the issuance of
\nnew location permits.<\/p>\n
He predicted the industry would be demand-driven instead of
\nsupply-driven as it was until 1997.<\/p>\n
\"Before the economic crisis, the market was dominated by
\ndevelopers (suppliers) but this time around demand will dictate
\ndevelopers.\"<\/p>\n
Simanungkalit recommended the government grant tax incentives
\nto foreigners to soak up the excess supply in the
\nupmarket housing market.<\/p>\n
He stressed the need to weed out unviable developers from
\nmarket by letting them go bankrupt. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/property-sector-on-road-to-recovery-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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