Campuses the bait for Yogya's real estate boom

Campuses the bait for Yogya's real estate boom

By Anis Suryani

YOGYAKARTA (JP): Scan local newspapers and the advertisements
appear to indicate that the property business, laid low by the
economic crisis, is on the mend.

Pages are filled with ads for housing and real estate
complexes, following years when their promotion was reduced to a
trickle.

Yogyakarta is currently marketing more than 25 housing
complexes with a total of over 3,000 units, 40 percent of which
are already sold. Some of the complexes are new but others are
the result of development projects put on hold during the crisis.

Griya Indah housing complex, which is being developed by the
Damai Putra Group, is the continuation of a previous project, now
at the seventh stage of its development. The sector consists of
only eight units, ranging in area from 160 square meters to 250
square meters. Prices start at Rp 329 million per unit.

Local developers say that the property business's reemergence
in the city was due to banks' willingness to give housing loans.
Although the interest rate for such a credit facility is still
high -- about 18 percent a year with a maximum period of 10 years
-- it has been effective in attracting more buyers, mostly for
middle range houses.

Seeing the opportunity, developers are building and marketing
houses of between 45 square meters, with the selling price of
about Rp 60 million per unit, and 70 square meters with a price
of about Rp 150 million.

According to the director of PT Kaltim Ciptayasa Pitoyo
Waluyo, developers were answering the market's needs.

"For the moment, no developers are daring to market simple
type houses because there are not yet banks offering credit to
buy such types of housing," he said.

Other developers are finding their niche in luxury housing.

One of them is Damai Putra, which is currently marketing Tirta
Sani Real Estate on Jl. Godean. The complex only offers houses
with an area ranging from 160 square meters to 240 square meters,
with prices ranging from Rp 370 million to Rp 600 million per
unit.

Like other elite complexes, Tirta Sani also offers some
additional facilities, including a clubhouse, fitness center,
swimming pool, jogging track and tennis court. So far, 60 of the
127 units marketed have been sold.

Campuses

Yogyakarta is known as a college town, and the development of
housing complexes is mostly in line with the presence of
campuses.

Newcomers to the area with family members studying at the
campuses are the main target market. It is also why properties
developed near campuses have a higher selling value.

One area considered prime property is Jl. Kaliurang in the
northern part of the city where a number of new campuses,
including the integrated campus of the Indonesian Islamic
University (UII), are located.

Perwita Karya, which is currently developing Griya Perwita
Wisata I, for example, is ready to market another 200 units of
various type. Perwita Karya's president director Frananto Hidayat
says most of the sold units are already occupied. Another nearby
complex, Saka Permai, developed by PT Saka Yasa Paramarta, has
also sold 80 of the 105 units it is developing.

In the eastern part of the city where noted campuses of the
UPN Veteran University, STIE YKPN, Atmajaya University and the
Emmanuel Christian University are found, a number of housing
complexes are also being developed. They include Griya Candi
Sari, Taman Krajan, Perum Candi Indah and Gejayan Baru.

In the southern and western parts of Yogyakarta, where there
are the campuses of the Indonesian Institute of the Arts (ISI)
Yogyakarta, Yogyakarta Muhammadiyah University and Wangsa
Manggala University, there are Kalirandu Selaras, Pelem Sewu,
Griya Alvita, Griya Gejawan Indah and Mitra Griya Asri complexes.

Pitoyo Waluyo said sales usually increased up to 60 percent
immediately ahead of, or during, the new academic year.

Yet, he said, a smart strategy was also needed to successfully
market the houses and maintain the business.

"During the crisis about three years ago, sales did indeed
decline. Yet, we could still sell some of our projects. It's
probably because of the strategy we apply," said Pitoyo.

Kaltim Ciptayasa is a relative newcomer to the city. The
company is based in Bontang, East Kalimantan. In its hometown,
the company has developed no less than 420 houses, all of which
were sold.

As Bontang was considered no longer able to accommodate new
housing complexes, Kaltim Ciptayasa decided to test its fortune
outside the region. It chose Yogyakarta and Malang because it
considered that they showed a similar potential market with
consumers in the education sector.

He said he was careful in marketing his projects. Although
there were many banks offering credit, he was not reckless in
using the facility. The company also did not proceed with
construction of units until there were confirmed buyers.

"Right after they pay the downpayment, no matter how much, I
finance the construction of the house for them. They are also
free to decide both the design and the sum of the installment
based on their own financial capability," said Pitoyo.

The firm exempts buyers from paying interest should they
finish paying the installment within a year. If they need more
than a year to pay, the interest is applied to the outstanding
portion of the installment.

"We apply a family-like relationship in running the business,"
Pitoyo said.