Housing market for expatriates continues revival

Housing market for expatriates continues revival

Debbie A. Lubis, The Jakarta Post, Jakarta

Jakarta's housing market for expatriates is expected to
continue to revive further this year despite the economic slump
and less favorable business environment in Indonesia, according
to property consultant Koll IPAC in its latest report received by
The Jakarta Post last week.

"During the last two years, the overall housing market for
expatriates has managed to revive after the crisis. Quality and
well-located houses with large yards and swimming pools have been
reportedly leased at stable rates, some even in excess of the
market rate," Koll IPAC said.

It added that, currently, single story houses, townhouses and
compounds were the types available for lease and that new houses
had been flooding the market, particularly in Kemang and Pondok
Indah.

The report revealed that expatriates tended to select
residential accommodation on the basis of its proximity to
educational, shopping, sporting and recreational facilities
equipped with high quality infrastructure.

"Permata Hijau, Simprug and Kebayoran Baru neighborhoods are
less attractive to expatriates with children due to the distance
to educational facilities and traffic problems," it said.

The report reveals that Kemang and Pondok Indah are the most
popular neighborhoods within the expatriate community while
Menteng and Kuningan are preferred by embassy communities and
those without children.

But reduced housing budgets for certain classes of expatriates
as a result of the economic downturn and the weakening of the
rupiah against the U.S. dollar had put some degree of pressure on
landlords in setting rents, the report said.

It says that housing rents in East Kuningan, which adjoins
Mega Kuningan, are higher than in other areas due to the superior
standard of built-in facilities. The same situation also applies
to housing rents in Pondok Indah and the Kebayoran Baru areas of
Brawijaya, Tirtayasa and Sriwijaya.

Meanwhile Kemang, Pejaten and surrounding neighborhoods offer
a wider variety of rental rates.

On average, according to the report, housing rents in Greater
Jakarta are relatively inexpensive and mostly charged in rupiah.
Houses with higher standards rented for between US$900 and $3,000
per month, it said.

The report added that most lease terms currently ranged from
two to three years compared with terms of between two and five
years prior to the crisis. The standard practice for rental
payments was for payment in U.S. dollars fully in advance, it
said.

Elsewhere Koll IPAC emphasized that the government should
speed up its efforts to restore foreign investor confidence in a
bid to meet the positive market expectations.

"Government should further guarantee stability and security
assuring a more conducive business environment in anticipating
the global market in 2003," it said.