Condominium

Just about everywhere you turn in West Jakarta, another condominium is shown to be on the rise. And so we are led to believe apartments are being purchased at a rate beyond belief. "68 percent sold" it says on one billboard planted adjacent to a block under construction which is barely 25 percent completed.

It was not long ago that I decided to visit a marketing launch of one condominium. I arrived just 90 minutes after the doors had opened and found that only half a dozen of all the apartments between the first and tenth floors had seemingly not yet been booked and even more surprising was the fact that construction work on the block had yet to start. Is this just a marketing ploy to encourage people to join in the purchasing madness or are these sale figures and claims factual? This is not an isolated case, incidentally. Other condominiums, too, seem to be in incomprehensible demand.

The least expensive apartment that I have found in any of these condominium blocks is a little over US$ 100,000 (Rp 220 million) which is for a low level apartment with just 43 sq. meters of floor space. Who, may I ask, is responsible for such inflated prices? Naturally, we can guess. More important, though, is: Who is buying? Is it large corporations wishing to provide short term expatriate workers or business clients with temporary accommodation or perhaps it's high-flying business folk who need somewhere impressive to accommodate their "bits on the side." The least likely, I'd think, would be an Indonesian couple with a couple or more kids.

With an average floor space of less than 75 sq meters, they'd be out of their minds. They'd surely be better off living 15 kilometers outside of central Jakarta, adjacent to a toll road for easy access to the center, with a 250 sq. meter plot of land with a two-story home occupying at least half of that area, private swimming pool etc. for... the same price.

Admittedly, condominiums are generally more central, generally provide exclusive facilities and are equipped with top class/quality fittings etc. But, for these prices and sizes?

The developers and marketing groups must be making a killing. The parties who could get themselves in a tangle would surely be the banks funding the projects and the initial buyers. If individuals are buying en masse in the hope of being able to rent out these apartments to expatriate workers (and subsequently reap income), they would be in for quite a surprise.

Firstly, any expatriate who does so would most likely need to be single or, at the most, be married without children. Secondly, contrary to what many Indonesian investors may believe, it is not the habit of most European and American expatriates to prefer residing in an apartment. They'd generally prefer a house. I'm not sure how Asian expatriates find apartment life, I admit. Thirdly, just how many expatriates are there renting accommodation in Jakarta at any one time? Surely, not nearly enough (nor will there be enough in the foreseeable future despite Indonesia's pace of development) for the majority of these apartments to be occupied.

JEREMY DUNCAN ROY GIBBONS

Jakarta