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.