Expert sees quick recovery in prime condominium market

Expert sees quick recovery in prime condominium market

JAKARTA (JP): A property consultancy firm predicted on Monday
demand for prime condominiums in Jakarta would recover sooner
than expected given the country's continuing economic
improvement.

PT Procon Indah/Jones Lang LaSalle said buyers' confidence
had begun to recover at the end of the second quarter of 1999
following improvements in the country's economy, the
strengthening of the rupiah and the peaceful general election.

"Individual investors consider residential property as part of
their investment portfolio due to banks' declining interest rates
and the (country's) expected political and social stability," the
company said in its biweekly report.

However, the company said sales of middle to lower-priced
condominiums would likely remain quiet until mortgage
availability and interest rates returned to precrisis levels.

The company also said prices quoted in rupiah for prime and
middle to lower-priced condominiums would maintain their decline
due to the rupiah's expected continued strengthening against the
U.S. dollar.

"We may see prices of prime condominiums stabilize in early
2000. For middle to lower-priced condominiums, prices are
expected to increase in early 2001 when demand has improved," the
company said.

Average condominium prices in rupiah declined 12.8 percent to
Rp 5.12 million per square meter in prime residential locations
over the first quarter of 1999. Prices declined by 8.8 percent to
Rp 8.3 million per square meter in Jakarta's central business
district (CBD).

Condominium prices quoted in U.S dollars fluctuated depending
on the exchange rate of the rupiah against the dollar. Average
prices in dollar terms declined by 19 percent in prime
residential locations and 15 percent in the CBD in the first
quarter of the year.

The company said condominium sales remained quiet in the first
half of 1999 due to political and social uncertainty ahead of the
general election.

However, the number of prospective buyers increased
significantly in mid-June, with the elections being free of the
much-feared violence. Most prospective buyers were in the market
for prime condominiums for primary home or investment purposes,
either in the primary or secondary market.

The total number of condominiums stood at 22,958 units as of
March 1999, a 0.9 percent increase from last year, according to
the report.

The first-quarter increase in condominiums was the result of
the completion of construction on the 131-unit Menara Matahari
Condominium in Karawaci, Tanggerang, and the 67-unit Gunung
Sahari Apartments in North Jakarta.

Another project, the 52-unit Sailendra Apartment in Mega
Kuningan, was completed in May 1999.

Several condominium projects were resumed in mid-June after
being temporarily halted during the elections.

Completion of the projects is likely to be at least six months
late due to the construction delay.

Construction of 4,656 units is currently under way, with
construction scheduled to be completed by the end of 2001.

Construction of two 1,587-unit condominium projects in Kelapa
Gading, North Jakarta, and Permata Hijau, South Jakarta, has been
delayed since the beginning of 1999, the report said.(gis)