200 developers may go bust

200 developers may go bust

JAKARTA (JP): Property baron Ciputra predicted yesterday about
200 developers would go bust because of the property market
slump.

Ciputra told a seminar yesterday these property developers had
built their projects at the wrong time.

"They started acquiring land and building their properties
when the sector was booming. Thus, when they finished their
property projects, the sector had started to get gloomy," Ciputra
said.

Most of the soon-to-go-bankrupt developers were small or
medium companies, Ciputra said.

He said the property market was weakening because of
oversupply. It was a good time to buy houses.

Despite the gloom, Ciputra said most property developers,
especially those with strong financial support, would make
profits this year and next year.

Property analyst Panangian Simanungkalit predicted earlier
that about 625 developers would go bankrupt next year because of
their liabilities, legal problems and the weakening market.

Panangian also predicted that problems loans in the property
sector would reach Rp 5.6 trillion (US$2.41 billion) next year,
up from Rp 5.25 trillion this year.

Ciputra disagreed with Panangian's figures, saying that
problems loans in the sector would not exceed Rp 1.5 trillion.

He said the 20 publicly listed property developers did not
have problem loans.

Ciputra said the market would remain dull next year because of
oversupply and the government's tight monetary policy.

But if lending rates, especially for housing loans, could drop
3 percent the market would start booming again in the middle of
next year, he said. (rid)