House sales set to rise this year, say consultants

House sales set to rise this year, say consultants

The Jakarta Post, Jakarta

House sales in 2003 will grow relatively strongly at around 29
percent despite the recent utility price hikes, according to a
property consultancy firm.

Panangian Simanungkalit, director of the Indonesian Property
Study Center (PSPI), said on Wednesday that sales were projected
to reach Rp 7.1 trillion (US$798 million), compared to Rp 5.5
trillion in 2002.

He was quoted by Antara as saying that the simultaneous
utility price hikes would not have a significant impact on house
sales.

He argued that sales would be much more affected by the
availability of housing loans and the interest-rate environment.

"The current relatively low interest rates will be sufficient
to increase housing sales this year," he said.

The Bank Indonesia benchmark interest rate has declined from
over 17 percent at the beginning of 2002 to around 12.89 percent
currently. The interest rates on mortgages now stand at between
17.5 percent and 19.5 percent.

He acknowledged, however, that the increases in fuel prices,
and electricity and telephone charges would push up the price of
houses by between 12 percent and 20 percent.

The PSPI predicted that in 2003, some 137,550 new houses would
be sold, a 25 percent increase over the 110,400 units sold last
year.

The firm said that the greatest number of sales would consist
of medium-to-small houses worth between Rp 40 million and Rp 80
million.

The company added that people would still focus on buying
houses in areas located near Jakarta like Bumi Serpong Damai,
Bekasi and Bogor.