Looking skyward for future housing needs
Looking skyward for future housing needs
JAKARTA (JP): Expatriates love apartments. Indonesians, as
observed by those who make such overly general observations,
prefer landed housing; i.e. they like to live close to the
ground.
Given these factors, take away the expatriates and there is
not much of an apartment sector here, which was the case between
1997 and May 1998. However, things are beginning to pick up as
the economy starts to get back on track, and expatriates are
again returning to the country.
The PriceWaterhouseCoopers property group says that occupancy
rates of leased and serviced apartments in the Central Business
District (CBD) for the year 2000 were 79 percent and 68 percent,
respectively. In "secondary areas" (a property euphemism for
those areas in less demand) the rates are lower at 67 percent and
65 percent, respectively. These figures represent gains of 15
percent in the CBD since the fourth quarter of 1998, and 7
percent for secondary areas since the second quarter of 1999.
Pricing for the good "Upper Grade" apartments in the CBD are
still mainly in US dollars. If you set your sights a little
lower, i.e. Middle Grade apartments in the CBD, you might get a
rupiah-denominated price. In secondary areas, all Upper Grade
leased and serviced apartments are in dollar prices, while strata
units are split between the dollar and the rupiah.
Good news though for leaseholders and bad news for landlords.
Over the next one or two years a new supply of apartment space is
expected to arrive, says the PWC property group. These include
the Permata Eksekutif Apartments, Taman Gloria Apartments, two
more towers for the Four Seasons, Permat Senayan, Pantai Mutiara
and Boulevard Park Plaza. This, in addition to the competition of
individual owners trying to lease their units, should help bring
down prices.
Building upward
Given the ever-increasing population and the demand to house
all of these people, it is no surprise that some people are
beginning to discuss the need for the city to begin building
upward. In the United States, for example, this is seen as
natural, and people in large cities often expect to live in
apartments. In nearby Singapore, where land is limited, the same
is true.
While it may be true that Indonesians prefer to live in houses
firmly set on the ground, the advantages of apartment blocks in a
large city like Jakarta are many and most people who get the
opportunity to live in an apartment, be they Indonesian or
expatriate, will attest to this fact.
But when building apartments are aimed at housing the masses,
the emphasis is firmly placed on affordability, not luxury.
Take as an example, rumah susun, the low-cost apartment block
in Pejompongan, and its residents. Darmy, who spoke to the Post
in October, lived by the railroad tracks in a shanty with no
running water. Now she has a low-cost apartment with water and
electricity. Is it simple? Yes. Is it an improvement from where
she used to live? Definitely.
The apartment has three blocks, each nine stories tall with 30
apartments on every floor, and all of the units have been sold.
While the larger property consultants and analysts may focus on
luxury apartments in the Golden Triangle and the expatriates who
rent them, low-cost apartments could be a very important housing
trend for Jakarta over the coming years.
While the signs may seem to point in this direction, property
development expert Andri Sutandinata told the Post property
developers had to find out what people wanted before going out
and building housing for them. In other words, will Indonesians
take to apartments like the nouveau riche to faux 16th century
Italian villas? (David Eyerly)