More apartment units enter the market
More apartment units enter the market
Business optimism remains strong in Jakarta's strata-titled apartment market, stimulating the development of new projects during the past three months.
Colliers International Indonesia (CII) property consulting company reported that there were an additional supply of 3,534 units during the second quarter of this year.
The additional supplies came mostly from new Airlangga, Mediterania Gajah Mada, Sudirman Mansion and SCBD Suite apartment buildings.
The additional stocks have brought cumulative supply to reach 35,904 units in the April-June period, an increase of 11 percent compared to the first quarter of this year.
In its Quarterly Research Report, Colliers said that six new projects with total units of 2,865 were introduced during the second quarter.
"Together with the existing projects, the above units will increase total Jakarta apartment supply to 67,864 in 2007. When the above future projects meet their schedule, the apartment market will grow by 26 percent in the 2005-2007 period," it said.
In the future, middle class apartments will lead the market with supply composition of 41 percent for middle to upper income groups and 26.7 percent for middle to low.
The Central Business District (CBD) area continued to be the largest provider, with 25.7 percent of the total existing supply. In term of project numbers, the CBD was also the most preferable location for apartment development with a total of 27 projects out of 101 developments in total.
"However, with the bulk of the units expected to enter the market in 2007, North Jakarta is predicted to substitute CBD as the largest unit provider with total of 24 projects."
Second home
Besides investment, CII also observed that cost and time consideration has also fueled apartment demand. Some buyers were interested in buying apartment units based on their proximity to the workplace and as second home.
Demand for apartments located in CBD area or adjacent to commercial spots were considered high mostly for small type such as one and two bedroom. Casablanca Mansion, Sudirman Park and The Peak apartments were examples of projects under construction that recorded a good absorption rate of above 80 percent.
According CII, the existing strata-titled apartment units enjoyed 74 percent occupancy in the second quarter of this year, leaving 9,335 units unoccupied.
The current under construction developments, on the other hand, achieved 67 percent take-up rate. "Anticipating double supply entering the market in 2006, Jakarta apartment take-up rate is predicted to decrease to between 68 percent and 70 percent.
Price
Competition between new apartment units and secondary units from the existing developments was quite tight during the second quarter.
Furthermore, secondary units could offer lower prices with modern fully furnished facilities which were better compared to their original specifications, CII said.
Apartment prices ranged from the lowest of Rp 5.5 million per square meter to the highest of Rp 26.7 million per sq m. On average price was quoted around Rp 12 million per sq m. In the luxury class, Four Season Residence and Oakwood Premier Cozmo commanded higher prices with published price of above Rp 25 million per sq m. -- The Jakarta Post