The global economic downturn has severely impacted the property\nbusiness in Indonesia, particularly in West Java, evidenced by a drop in\nproperty sales of up to 40%. Chairman of the West Java Regional\nLeadership Council of Real Estat Indonesia (REI), Norman Nurdjaman,\nexplained that despite the decline, the remaining 60 to 70% market share\nstill represents significant potential for developers. \u201cTo win this\ncompetition, DPD REI West Java is focusing on strengthening the internal\ncompetencies of its members, one of which is through Digital Marketing\nTraining activities. We must compete by equipping REI West Java\u2019s\nmarketing staff and content creators with insights and technical skills\nrelated to social media optimisation,\u201d he stated in Bandung on\nTuesday.<\/p>\n
According to Norman, the sales decline of up to 30% was triggered by\nweakening public purchasing power due to the global situation. The surge\nin the US dollar exchange rate has impacted the rising prices of\nimported substitute raw materials and direct imported materials, such as\ndoor handle components. On the other hand, the supply of local natural\nmaterials has also been disrupted since the implementation of a\nmoratorium on class C mining in West Java. \u201cThis policy has resulted in\nsoaring prices of building materials in the field. REI developers\nlocated on the border of West Java and Central Java are forced to buy\nmaterials from Central Java or other areas where supply is still\navailable. As a result, prices rise and trigger inflation,\u201d he\nexplained.<\/p>\n
Norman noted that the industry is currently trapped in a state of\nstagflation, where inflation and deflation occur simultaneously. This\ncondition is highly avoided because its impact directly hits various\neconomic sectors in a chain reaction. \u201cAmidst this difficult macro\nsituation, the potential housing market (backlog) in West Java is\nactually still very high. Nationally, the government\u2019s backlog figure\nreaches 10 million units, while other calculations reach 15 million\nunits,\u201d he said. According to Norman, from the government\u2019s figures,\nWest Java accounts for at least 20%, or around 2 million units. This\nbacklog figure of 2 million units is a very potential market for\ndevelopers. However, the economic situation forces commercial housing\ndevelopers to raise selling prices.<\/p>\n
Regarding subsidised housing, its price is held back by government\npolicy. There has been no increase in the price of subsidised houses for\nthe last three years. With the rising dollar exchange rate and soaring\nnatural material costs, Norman stressed that it is now very relevant for\nthe government to immediately raise the base price of subsidised\nhousing. In addition to production factors, developers are currently\nfacing two main obstacles from the consumer side and land regulations.\nConsumers are finding it increasingly difficult to apply for Home\nOwnership Credit (KPR) due to poor records in the OJK\u2019s Financial\nInformation Service System (SLIK), triggered by online loan and paylater\ndebts. Although the government once provided leeway that SLIK records\nunder IDR 1 million could be annulled, banks remain selective. \u201cBanks\nare very strict in assessing the risk character of prospective debtors\nbefore approving credit,\u201d he said.<\/p>\n
Norman added that another issue faced by REI members is regulatory\nuncertainty regarding land, specifically related to LSD, LP2B, and LBS.\nDevelopers often suffer losses after investing capital to purchase land.\nREI members will not dare to buy land that from the outset is designated\nas Green Open Space. \u201cDevelopers always check land use designations with\nBappeda or the Spatial Planning Agency. However, the obstacle is that\nsometimes when purchased, the status is a yellow zone (buildable), but\nover time, the designation changes to a green zone. This is a regulatory\nissue that needs serious attention from various related parties,\u201d he\ncontinued. For this reason, DPD REI West Java will discuss these\ndefences in a series of Regional Working Meeting activities through a\ndiscussion themed \u2018Answering Land Regulation Challenges in the Property\nBusiness\u2019, scheduled for Wednesday.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/west-java-property-industry-declines-by-up-to-40-amid-global-economic-pressures-1784033462", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }