Apartment sales predicted to rise next two years
Apartment sales predicted to rise next two years
JAKARTA (JP): A property executive predicted yesterday that
demand for apartments among Indonesia's middle class will boom in
the next two years.
Henry Tjokrohartono, the marketing director of Colliers
Jardine's residential sales division, said that until 1996,
apartment sales would continue at the present level.
"Prices may not decline, but demands may increase as
Indonesians become more familiar with living in high-rise
buildings, and feel that it has greater advantages," he said.
Ria Fariani, associate director for residential leasing,
considered that Indonesians needed a "model", which would show
how an Indonesian family could live in a high-rise building, and
not necessarily in a conventional ground-level house.
Currently, she said, up to 95 percent of the apartment tenants
in Jakarta are expatriates.
According to Colliers Jardine's research division, the
cumulative number of apartments in Jakarta has increased 20 fold
from 170 apartments in 1987, to 3,963 last year.
The figures are expected to continue rising to 9,276 this year
and soar to 39,240 in 1997.
In spite of the growing demand in the property business, Henry
said, a number of developers have either postponed or canceled
the construction of apartment buildings.
He said that this was mainly caused by financial problems,
legal and regulatory matters, and what developers considered was
a low demand.
"Often the case is actually not low demand, but that the
expectations of developers are too high," he said.
Ria said that apartment sales in Jakarta did not always
reflect a corresponding occupancy level because many apartments
were purchased as investments.
Contrary to what several business analysts say, she said,
oversupply of apartments only occurred in several parts of
Jakarta, especially in North Jakarta; whereas demand in other
parts of Jakarta, particularly in South Jakarta, was constantly
high.
"Oversupply only happens where the target market consists of
the middle and lower-middle income classes. There is no
oversupply for upper-class apartments," she said.
Townhouse
Aside from the booming apartment business, Ria said the
townhouse business was also on the rise.
"Expatriates usually prefer townhouses, especially those which
have complete supporting facilities, because they are more like a
house," she said.
However, developers are reluctant to build townhouses because,
with the same plot of land, it is more profitable to build a
high-rise building.
"For a plot of land measuring 4,000 square meters, a developer
can build only 20 townhouses but hundreds of apartments," she
cited.
Townhouses are currently rented for US$2,500 to $4,000 a
month, while rents for apartment ranges between $15 and $26 per
square meter per month.
Between 1991 and 1993, strata title apartments were priced
between $1,500 and $2,300 per square meter.
Currently, prices are $800 to $1,299 for the lower-middle
income category, $1,300 to $1,799 for the upper-middle category,
$1,800 to $2,299 for the lower-upper and up to $3,600 per square
meter for the upper income category. (pwn)