BI policy not a problem for developer

BI policy not a problem for developer

JAKARTA (JP): Executives of PT Primagraha Majumakmur, the
developer of Casabella Court, said a warning issued recently by
Bank Indonesia Governor J. Soedradjad Djiwandono, to reduce loan
approvals for the real estate sector will not affect the
construction of their project.

They said the Casabella Court condominiums, located in the
Sudirman Central Business District, is offering luxury apartments
for those who can pay the US$2,500 per square-meter.

"Our project is not a mass production. We are constructing 178
apartments only, including six penthouse apartments," Budiman
Effendi, a member of PT Primagraha Majumakmur's board of
directors, told a press conference yesterday.

He said these facts will not affect the construction or
marketing of the US$57 million project, of which half are loans
from local banks.

Budiman said that up until now, 30 percent of the 178
apartments have been sold with most of the buyers intending to
live there. Prices range from $318,000 to $447,000 each.

"There is a possibility that most will stay here from Monday
to Friday and spend the weekend in their houses outside the
city," Budiman said, adding that construction is expected to be
completed in December 1996.

Casabella Court condominiums will be the first residential
complex built in the Sudirman Central Business District and will
be dedicated on Jan.15.

The Central Bank governor warned recently that this year banks
should be wary of the growing demand for loans in the real estate
sector, which has expanded at an unchecked pace.

A recent report stated that loans for the property business
reached Rp 28.2 trillion ($12.8 billion) as of October last year,
which accounted for 15 percent of the country's total loans.
Around 70 percent of the property loans were for the development
of apartments and middle-class houses.

Another executive of PT Primagraha Majumakmur Mimy C.
Ratulangi said the warning will not affect all housing developers
because banks have to analyze several factors before providing
loans for a project.

Christianto Wibisono, director of the Indonesian Business Data
Center, recently observed that expansion of credit for upper-
class housing is a bit risky in the long run because the market
is very artificial. People buying luxury houses and apartments
are mostly driven by speculation motives, not by primary demand,
he noted.(yns)