High-rise developers target young professionals

High-rise developers target young professionals

Abdul Khalik, The Jakarta Post, Jakarta

New apartments and condominiums continue to flood the market
despite the generally low occupancy rates. How do developers try
and reach their target market of young professionals, singles and
married couples? The following is the final in a series of
articles on apartments and condominiums in the capital.

As a newly married couple who used to live in a rented room near
the University of Indonesia campus in Depok, West Java, Cecep,
27, and Putri, 26, believed living in a downtown apartment would
be financially impossible for them.

"Of course, we would have been very grateful to have our own
apartment in the center of the city. But we thought it was beyond
our means. What we imagined was that we would buy a house in the
suburbs, such as Tangerang, Depok or Bekasi," Cecep said.

Cecep, who has worked for the last four years as a corporate
lawyer at a foreign company on Jl. Sudirman, Central Jakarta, now
earns about Rp 6 million a month.

Putri makes Rp 4 million a month in the accounting department
at a private bank on Jl. Gatot Subroto, South Jakarta.

Although the two still felt attached to their Depok
neighborhood, the distance they had to travel to work was a major
problem.

"I always wanted to live near my office because it was quite a
struggle to get to work every day with the traffic from Depok to
Jl. Gatot Subroto. But renting a house downtown would have cost a
lot. And I did not think a couple like us could afford to buy an
apartment in Setiabudi, Kuningan or the Gatot Subroto area,"
Putri said.

Thousands of young professionals like Cecep and Putri who earn
more than Rp 5 million a month still think it is beyond their
reach to have a decent apartment downtown, close to their office.
Instead, they plan to buy a house in one of the complexes in
Tangerang, Bekasi, Depok or Bogor, which can mean over an hour
commute to downtown Jakarta.

Now these young professionals are the target market for
apartment developers, who are now offering affordable prices and
convenient installment plans to help these people afford an
apartment.

PT Bakrie Swasakti Utama, the developer of the Taman Rasuna
Apartments, recently unveiled its new tower called the 18th Taman
Rasuna Residence, which is aimed at young professionals with
salaries of about Rp 5 million per month.

"I think singles or professional couples with salaries of
about Rp 5 million can buy an apartment on installment. They just
have to pay 20 percent to 30 percent as a down payment to secure
a unit," said PT Bakrie vice president Ferry Supanji.

Those in the market can buy an apartment through the primary
market or the secondary market.

Lower end apartment cost between Rp 250 million and Rp 400
million, and applicants have to provide Rp 50 million to Rp 100
million as a down payment. They can then pay the balance over 10
years to 15 years with the current annual interest rate of 12
percent to 13 percent.

That is about the same as the cost of buying an average-sized
house in Bumi Serpong Damai in Tangerang, Bintaro in South
Jakarta, or Pesona Kahyangan in Depok.

"The procedure is really not difficult. Usually, we have them
deal with a bank as long as they can provide us with all the
necessary papers, such as family card, identity card and salary
slip," Ferry said.

He said the financing was usually done through the same banks
involved in financing the development of the apartment towers.

Get an apartment the easy way

1. Visit several developers' marketing offices to compare prices,
locations, buildings and credit schemes of different apartments.

2. Most apartment developers hold an exhibition if they are about
to launch a new project. Try to visit these exhibitions as
developers usually invite banks to attend so customers can
discuss the credit schemes on the spot.

3. Make a purchase order with a developer.

4. Discuss with banks the financing schemes they offer. Banks can
usually provide a rough picture of whether they can provide
credit and give some details on their credit schemes.

5. Prepare your identity card, family card, salary slip and bank
statement, as well as marriage certificate if you are married.
Give these papers to the developer and let them deal with the
bank.

6. Wait for credit approval from the bank. The bank will notify
the developer and the customer if they have approved a credit
scheme.

7. Sign a contract with the bank and developer. Usually,
customers will have to wait about two years before the apartment
tower is complete.