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.