More condomonium expected to come on the market this year
An increase in the total number of rental apartments entering the market was seen at the end of 2001 with the conversion of five condominium units in Batavia apartments and 20 units in Juanda Regency Condominiums into serviced apartments, according to a property market report issued by property consultant Procon Indah Research.
However, the sale of 37 units of serviced apartments at Puri Imperium that was previously managed by Mercure to individual owners reduced the rental apartment supply by 12 units.
Change of use of 85 units at the former JICA building from serviced apartments to a four-star hotel further reduced the future supply. However, Pondok Indah Golf Apartment (Tower II) with 115 units will continue construction and enter the market in the second quarter of 2002. "This will bring the total supply of purpose-built rental apartments to 322 units," Procon says.
No new supply entered the strata-title apartment market by the end of 2001. Total cumulative supply remained at 26,313 units as of December 2001, comprising 25,558 strata-title apartment units and 755 strata-title townhouses.
According to Procon, the strata-title (for sale) projects to be completed by 2003 remained at 638 units including 85 units that are expected to come from townhouse projects. Some of the proposed projects that are expected to gradually enter the market in the year 2002 include Taman Paris Phase V and VI, Da Vinci Apartment and Pantai Mutiara Apartment Tower I.
Overall demand for rental apartments remained stagnant in the fourth quarter of last year with 59.8 percent of the total supply being taken up. Compared to the past quarter, the overall demand for rental apartments had increased slightly during the fourth quarter of 2001. However, serviced apartments, particularly in Central Business District (CBD) area, experienced a decrease in occupancy due to the holiday season and the increased security concerns which had caused some expatriates to leave. Meanwhile serviced apartments in the secondary area with short-term local travelers as the main target market booked an increase in occupancy over the fourth quarter of 2001, particularly during the festive season in December.
Sales of the strata-title apartments in the primary market were quite active in the fourth quarter. "Puri Imperium achieved the highest sales record with 16 units sold, followed by Batavia Apartments with 10 units sold," Procon adds.
Most sale transactions occurred in middle to upper-middle class projects that offered good prices in rupiah. Generally, the selling prices ranged from Rp 5 million to Rp 7.5 million per square meter.
Most of these transactions were in cash as banks are still very selective in providing mortgage financing for condominium purchase and cash-rich local purchasers still dominated the buyer profile.
The overall demand for leasing accommodation is likely to remain soft until the end of 2002 as business activities remain slow amid uncertainty on realization of foreign investment approvals.
Procon says that sales of strata-title apartments would also remain modest as the result of the implementation of a new luxury tax, which will also dampen condominium price growth in the primary market in the short term. -- The Jakarta Post