Housing price

Housing price

It was shocked to read in the newspaper of Dec. 5, 1995, that
there are now 189 apartment blocks in Indonesia (mostly in
Jakarta) built in the past two years, whereas the same number of
apartments were built in Singapore over a period of 30 years.
This simple fact is indeed shocking because I believe it will
have the following consequences:

* Oversupply of apartments.

* High potential for bad credits (there are now Rp 43 trillion
in property business credits).

* Disproportionately high bank interest rates.

* Soaring apartment/house prices.

* An over-heating economy with possible high inflation.

* Unfortunate consumers/buyers.

These quiet facts raise another question as to whether there
is really a master plan in the development of the Indonesian
economy. In my opinion the ultimate goal in developing this
country is to bring about greater prosperity for the Indonesian
people. But in this particular case it is the businessmen who
gain most, because they build the apartments, not with their own
money, but with the funds collected from the "buyers-to-be" and
the banks. The banks protect themselves by imposing high interest
rates on their debtors.

I hope the government will do something to prevent people from
being exploited.

H.W. PIENANDORO

Bogor, West Java