Apartment owners now prefer leasing: Agent
Apartment owners now prefer leasing: Agent
JAKARTA (JP): Property consultant Colliers Jardine sees a
shift in trends in the Jakarta residential apartment market as
more and more developers rent their units out instead of selling
them in order to offset the decline in sales in the second
quarter of this year.
Colliers Jardine said in a statement on Friday that as of the
second quarter of 2001, the number of strata-titled residential
apartments in the city totaled 23,975 units, of which 24 percent
were left unsold.
The low level of sales was attributed to a lack of confidence
in Jakarta's property market caused by political and economic
instabilities in the country, as well as the increase in value-
added tax on luxury goods, including apartments of over 150
square meters, it said.
It, however, did not provide sales figures for the second
quarter period.
"There are no signs of an immediate turnaround yet," Colliers
Jardine's managing director for Indonesia Richard Rossiter said
in the statement.
Oversupply was likely to continue as 460 units will come on
the market over the 12-month period ahead, he said, explaining
that this will cause an increase of 1.9 percent in the overall
stock level.
Due to the unsatisfactory sales, a large proportion of
residential stock has been offered on the rental market,
competing with 2,714 serviced apartment units and 3,493 leased
apartment units
High profile strata-titled projects such as Puri Casablanca,
Casablanca Apartments, Menara Batavia Apartments and Four Season
Residences are renting their units out, the company said.
The shift was further highlighted with property developers
offering short-term leases of three to six months, whereas during
the pre-crisis years a three-year lease term was the norm.
Furthermore, tenants no longer needed to pay rent in advance
for periods of two to three years, but for shorter periods, it
said.
"Generally, rentals and capital values in the residential
market will remain depressed due to deepening political and
economic instabilities," Rossiter said. (tnt)