Developer sees sales of houses rising next year
Developer sees sales of houses rising next year
JAKARTA (JP): Top real estate executive Enggartiasto Lukita predicted yesterday that sales of new houses, which have been depressed this year, will pick up early next year as interest rates decline.
Enggartiasto, the chairman of Real Estate Indonesia (REI), said after attending the opening a housing exhibition that deposit rates have already begun declining. This, he added, should lead to falling credit interest rates by early 1996.
Enggartiasto ruled out any drop in the prices of new houses despite the falling interest rates. "It is almost impossible to reduce prices. It's never happened before."
He said interest rate levels are a greater factor than price in determining when a person decides to buy a house.
With lower interest rates early next year, many people will be prompted to buy houses, he said confidently.
The interest rates on housing loans are currently above 19 percent a year, according to an official of Bank Tabungan Negara, a state-owned bank specializing in housing credits.
The interest on loans for houses measuring 70 square meters, however, is subsidized by the government. The annual interest for houses measuring less than 21 square meters is 8.5 percent a year while those measuring between 21 square meters and 70 square meters face 11 percent interest.
The Real Estate Expo 1995, organized jointly by REI and PT Debindo Multiadhiswasti, was opened by State Minister of People's Housing Akbar Tanjung at the Jakarta Convention Center yesterday. It was also attended by International Real Estate Chairman Ferry Sonneville.
More than 130 developers, four banks and 37 interior design companies and building material suppliers are taking part in the exhibition which will run until Nov. 12.
The Indonesian Consumers Agency, an increasingly vocal consumer watchdog, has also opened a stand in the exhibition to inform prospective house buyers of their rights.
Enggartiasto said that many of the new houses sold, particularly those in the upper segment of the market, are chiefly the object of speculators who buy in the hope of selling the houses later at higher prices.
However, he said, the market for medium and small houses in Jakarta, mainly those priced below Rp 150 million (US$66,000), is not affected by speculation.
Akbar, after opening the exhibition, witnessed the signing yesterday of a Rp 3.6 billion ($1.6 million) cooperation agreement between PT Putra Alvita Pratama, the developer of Kota Legenda in Bekasi, and PT Telkom, the state telecommunications company.
Under the agreement, the developer will build the telecommunications facility in the new satellite town and later hand it over to Telkom. (31)