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)