Middle class apartment market seen promising

JAKARTA (JP): A developer said it would build more apartments for the middle class as it was a rapidly growing market.

Sarkoro Handajani, marketing director of the Putra Surya Perkasa group (PSP), said on Monday the company would survey how many middle class people would actually want to live in apartments.

He said the market within the monthly income group of Rp 1.5 million (US$619.6) to Rp 5 million was growing up to 6 percent a year in Greater Jakarta.

"There are around one million families in this group now," Sarkoro said.

Now there is an oversupply of upper class apartments, he said, but middle class ones are still in great demand.

City officials have cited a need for middle class apartments, but prices offered by developers are higher than the city hoped. Developers have said land price is their main obstacle.

Last year city secretary Prawoto S. Danoemihardjo said there was a great need for 30-square-meter apartments priced from Rp 30 million. The city is still finding it difficult to subsidize 50 percent of the apartments priced at Rp 26 million for resettled slum dwellers.

Meanwhile PSP representatives said their apartments, priced from Rp 88.7 million, were selling well. Sarkoro said the relatively cheap prices were because the apartment building was in a PSP housing complex, Taman Vila Meruya, where facilities already existed.

Besides buying apartments to live in, people were also confident about the increased resale value, another marketing manager said.

Also on Sunday, the developer of the Taman Rasuna apartments, which are priced from Rp 184 million and claimed by the developer to be affordable, claimed it would sell its remaining 20 percent of 953 completed apartments in a short time.

As an incentive for private developers, Governor Surjadi Soedirdja issued an instruction to make building permits for cheap apartments easier to obtain.

Technical director Jimmy Sutedjo said he did not know of incentives, but permits were relatively easier to get since Surjadi's appeal.

An information officer at PSP said almost 50 percent of the yet to be built 380 Permata Meruya Apartments in Kembangan, West Jakarta, had been sold since April 1. Many families had put their names down for two 48-square-meter two-bedroom apartments priced from Rp 88.7 million, he said.

Older couples mostly opt for the 96-square-meter three-bedroom apartments, priced from Rp 164.2 million. Most of the apartments would have two bedrooms, as the target market was executives with small families. Higher priced apartments would be on the 19th floor, at Rp 214 million. Free parking would be available for 402 cars.

A tender for contractors is to be held soon before construction begins in May, technical director Jimmy said.

Marketing manager Budi Hamidjaja said around 60 percent of the project funds were derived from the PSP group and the remainder from consumers' advanced payments.

The Permata Meruya was the seventh apartment project of the group. Budi said other apartment buildings were under construction, including Permata Surya in Cengkareng, West Jakarta.

Permata Surya apartments were priced from Rp 37.5 million but did not include free parking lots.

Meanwhile PSP's marketing director Sarkoro said the company's survey found price was still the most important factor in the decision to buy an apartment.

"The second is location, the third is the developer and the fourth is the apartment's surroundings," he said. (anr)