Apartment supply expected to jump by 183% this year
Apartment supply expected to jump by 183% this year
JAKARTA (JP): Jakarta's apartment market will be heavily
oversupplied this year because the number of apartments will jump
183 percent to almost 33,600 units this year, property consultant
Colliers Jardine said yesterday.
The head of Colliers Jardine's research department, Evelyn
Khoo, said that as of February, the number of apartments
increased 4.7 percent or 551 units to 12,426 units.
"We expect more than 20,000 units will be completed this
year," she said.
She said most of the new apartments would be small because
developers were targeting the lower end of the market to combat
weakening demand.
She said that as of February the average occupancy rate of
strata apartments, which make up 67 percent of all apartments,
dropped about one percent to 50 percent.
Last year the occupancy rate rose 3.7 percent from 47.3
percent to 51 percent.
The average occupancy rate of rental apartments, which make up
20 percent of all apartments, fell five percent from 93 percent
last year.
Occupancy rates in serviced apartments, which make up 13
percent of all apartments, dropped from 85 percent to 80 percent.
She said rent prices in secondary areas were generally US$14 a
square meter, while those in primary areas ranged between $17 a
square meter and $39 a square meter.
The firm's chairman, Trevor J. Peach, said government
regulation No.41/1996, which allows foreigners to buy property,
had not yet created a sizable demand from foreign buyers.
"I notice from my own experience that foreigners are
discouraged by an unclear criteria of foreigners eligible to buy
property here," he said.
He said foreigners were also discouraged because their
ownership was restricted to property built on land with a right
of use title, which is valid for only 25 years with the
possibility of a 25-year extension.
He said that because local people owned the property in
Indonesia under the title of the right of building, foreigners
wanting to buy would have to change it first into the right of
use title. "This is another obstacle," he said.
Khoo estimated total office space would rise 18.4 percent to
3.8 million square meters this year, retail supply 17.62 percent
to 2,003,000 square meters and hotel rooms 41 percent to about
21,200 rooms.
She said the total land zoned for industrial estates in West
Java was 12,079,600 hectares. Of this only 9,073 hectares has
been developed. About 2,800 hectares of the developed land is in
Jakarta.
"I expect more companies will come to the industrial estates
because of lower costs and the government's policy which
encourages them to enter the estates," she said. (bnt)