Property recovery seen in four years

JAKARTA (JP): The country's property sector, which has been severely bruised by the monetary crisis since August, is estimated to recover in three to four years, according to the Indonesian Association of Real Estate Developers (REI).

The association's chairman Edwin Kawilarang said here yesterday that if the national economy needed two years to recover, the property sector may need three or four years.

Edwin said the monetary crisis which has hit Southeast Asia since early July, had greatly affected the country's property sector, decreasing sales and forcing many developers out of business.

"At least 789 of the association's members are no longer active," he said after joining the "Love Rupiah" campaign at Bank Dagang Negara's central office yesterday.

He said the association's active members currently consisted of only 1,660 companies, or only 68 percent of 2,446, the total active members before the currency crisis.

He said the decline in sales had spread to low-cost houses, while the demand for middle to upper income housing and luxury houses had reached zero.

He said with the decrease in earnings, developers still have to pay their debts, which have jumped due to the increase in lending rates.

He suggested developers find a new strategy to attract buyers, which he estimated would help developers.

"Or they can stop their operation temporarily and wait patiently until the crisis is over," he said.

He said the government could help the country's property sector by loosening the liquidity, which would drive banks to give housing loans.

At yesterday's campaign, which aimed to restore public confidence in the national currency, Edwin sold his personal dollar holdings of US$7,000 at an exchange rate of Rp 6,850. (gis)