From: The Jakarta PostLuxurious facilities: The dining room of an apartment at The Summit, Kelapa Gading in North Jakarta. Major upscale apartments are commonly equipped with luxurious facilities and amenities, such as a swimming pool, a spa and fitness centre.
By Arief Rahardjo, Contributor, Jakarta
By Arief Rahardjo, Contributor, Jakarta
After a slight increase in the last quarter, sales in the Jakarta condominium market declined again by 0.1 percent during the review quarter. The market pre-sales rate also declined by 0.3 percent from the previous quarter’s level. The overall performance of the market, however, is still better than in the first six months of 2009.
Enquiries declined in the last two months of the review quarter as potential buyers delayed their decision to buy due to the year end holiday. Some projects adopted a different marketing strategy in 2009 for market repositioning and a revamping of the project concept. Pre-sales of the lower-middle condominium segment, especially the rusunami (rusun sederhana milik) project, experienced a slight increase of about 0.1 percent from the previous quarter, however, by about 2.1 percent year on year.
The decrease in the mortgage rate has slowly boosted sales, especially in the lower-middle to middle segment.
This pattern is related to the macro condition. The country’s annual economic growth in 2009 is estimated to reach between 4.1 and 4.3 percent, dropping from 6.2 percent recorded in the previous year. Meanwhile, several general economic indicators showed an improvement in the fourth quarter of 2009. The rupiah strengthened against the US dollar, and by mid December 2009, the rupiah stood at Rp 9,425 per US dollar or appreciated by 2.7 percent from the rate recorded at the end of September 2009. In a YoY comparison, the rupiah strengthened significantly against the US dollar by 16.2 percent (from Rp 10,950 per US dollar recorded at the end of December 2008).
The stock market continued to show favorable activity over the fourth quarter of 2009 as indicated by the ISX composite index that increased from 2,295 at the end of September 2009 to 2,426 by mid December 2009. Interest rates also decreased further and a much lower inflation rate was recorded during the review quarter. The 2009 annual inflation rate is projected to only reach 2.9 percent, much lower than the 11.03 percent recorded in the previous year. The 2009 inflation rate is notably the lowest since 1999.
Meanwhile, the one-month SBI rate continued to decrease from 6.48 percent at the end of September 2009 to 6.46 percent at the end of December 2009, whilst the three-month SBI rate slightly increased from 6.55 to 6.59 percent. In line with the one-month SBI fall, investment credit decreased further from 13.94 percent at the end of September 2009 to 13.8 percent at the end of December 2009
And what about condominium sales? The cumulative sales rate of existing condominiums in Greater Jakarta was recorded at 94.0 percent in the 4th quarter of 2009, a slight decrease of 0.1 percent from the previous quarter and 0.3 percent from last year’s figure. The pre-sales rate was recorded at 58.2 percent, and also a decrease of 0.3 percent from the last quarter’s figure and 1.4 percent from the last year’s figure.
The decrease in both the sales rate and pre-sales rate seen in 2009 reflects the impact of global economic conditions that began to take effect in 2008. The upper-middle condominium segment still had the highest pre-sales rate of 70.3 percent. Meanwhile, upper segment and middle condominium segment recorded pre-sales rates of 58.9 percent and 53.7 percent respectively.
The rusunami projects experienced a slight increase in sales in the review quarter compared to in the previous quarter. Of the total 41,871 units, around 77.3 percent were claimed to be sold by developers. Compared to the last year’s figure, the pre-sales rate of the rusunami projects also experienced an increase of about 2.1 percent.
Most projects that should be handed over to the buyers by the 4th quarter 2009 were delayed to early next year. The project that started hand over in the review quarter was Gardenia Boulevard contributing 496 new units to the market and bringing the total cumulative supply of condominiums in Jakarta to 74,974 units. There were no newly completed rusunami projects in the review quarter as most projects delayed completion to next year. The delayed completion of these projects - excluding the rusunami projects - to the next year will make the future supply in 2010 reach a record 18,191 units.
There was only one condominium project launched during the review quarter, The Mansion (the extension of Bellagio Mansion in Kuningan), bringing the total proposed supply to 28,232 units. No new rusunami projects were launched in the market during this review quarter.
The sales prices in 2009 were relatively stable with a modest increment. Prices remained relatively unchanged during the review quarter. The average price in the CBD grew by approximately 0.3 percent to Rp 15.78 million per square meter (sqm), while the average price in the prime area decreased by only 0.2 percent to Rp 15.48 million per sqm.
The significant supply may peak in 2010 due to the delayed completion of most projects. The high supply is expected to create tougher competition in the market. Some projects which were postponed and sales put on hold are also expected to be relaunched with a new concept this year. With an anticipated tougher market, the sales prices are expected to stablize if not slightly decline to boost sales.
The writer is associate director PT Cushman & Wakefield Indonesia.