Competition in property predicted to get tighter

Competition in property predicted to get tighter

JAKARTA (JP): The property market will be tighter next year, according to the head of the association of Indonesian real estate developers' supervisory board.

M.S. Hidayat told property developers Wednesday to adopt new marketing strategies to survive next year.

"The competition in the property market next year will be very tight. Small and medium developers will find it hard to survive without adopting new marketing concepts," he was quoted by Antara as saying.

He agreed with analysts and businesspeople that the property market slump would continue next year because of oversupply.

Property analyst Panangian Simanungkalit predicted 625 developers would go bust next year because of their liabilities, legal problems and the weakening market.

He predicted problem loans in the property sector would reach Rp 5.6 trillion (US$2.41 billion) next year, up from Rp 5.25 trillion this year.

Property baron Ciputra said the weakening market would largely affect small and medium developers, while big developers would continue to reap profits.

He predicted only 200 developers would go bankrupt.

Hidayat said developers had to market progressively to get buyers, such as via door-to-door sales instead of relying on advertising.

Buyers were becoming more choosy, preferring housing complexes with good environments, security, accessibility and affordable prices, he said.

He said the government had ruled that developers create good environments at their developments. They had to allocate 40 percent of their housing estates for roads, parks and other amenities.

Developers could create security with only one gateway to housing complexes, he said.

On accessibility, Hidayat said buyers would buy houses at faraway complexes so long as there was accessible transportation.

Buyers were also keen on house designs.

"In the past, if they heard there was a cheap housing complex, they soon put up their booking fees. Now, they first survey the location and check out house designs," he said.

Hidayat urged developers to focus on the medium and cheap housing market because the property market would be dominated by residents, not investors.

"Complexes with big and expensive houses will not sell next year," he said. (jsk)