Property recovery seen in four years

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"At least 789 of the association's members are no longer
active," he said after joining the "Love Rupiah" campaign at Bank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)