Economic
growth today was vigorous and tend to change for the better to jack up property
market in Indonesia. The energy was evident with property transactions which
continued to grow through 2011 to 2012, accompanied by constantly increasing price
in transactions. Real Estate Indonesia (REI) estimated the property market
would remain to be prospective in 2013, following Bank Indonesia’s signal which
maintained BI rate at 5.75%.
While
being supported by the potential economic growth of 6.8%, this sector was also
affected by low market penetration in Indonesia. In the housing sector,
Indonesia was still having backlog of around 13 million units of houses. Each
year there was additional demand of around 720,000 units of houses in line with
population growth. Therefore, although being entangled by economic crisis in
Europe, players and observers of property remained optimistic that property
business in Indonesia would grow in 2013.
Chairman
of REI Setyo Miharso stated in Jakarta on Friday (11/1/2013) he felt confident
that the property market would grow in 2013. Maharso stated that to look at
last year, the condition of property market in Indonesia would be governed by
domestic demand, for residential or commercial. On the other hand the crisis in
Europe and America was “blessing” where foreign investors now focus their
attention on Southeast Asia, among which was Indonesia. The condition Asia,
among which was Indonesia. The condition would bring positive impact on the
property market in Indonesia.
Maharso
disclosed that the potential of property market at home was still enormously
big with the existing backlog in the residential sub-sector which came to 13,6
million units. Growing demand for houses came to 800,000 – 1 million units per
year, while supply or new houses being built was only 200,000 – 300,000 units
per year. This means that the property market, particularly residential was
highly prospective in Indonesia. “The domestic property market in Indonesia is
still highly potential, especially to consider that property business is
capital intensive business” Maharso remarked.
Maharso
admitted that in spite of slowdown in property business in Indonesia he still
predicted the property market would still have great demand which was stable;
because while the need for housing was high, the property sector was still a
challenging alternative of investment because it was stable compared to shares
or gold.
Meanwhile
the middle and upper property market was showing high performance compared to
the property market on general. This was indicated by many developers who
believed that price would be high in Jakarta’s outskirts which was why they
aggressively launch new products like luxurious clusters.
Meanwhile
to quote a report entitled Emerging Trends in Real Estate Asia Pacific 2013
launched by Urban Land Institute (ULI) and Price Water House Coopers (PwC) the
City of Jakarta stood a chance to be number one property center of the world in
2013. If this was true, this Indonesia capital city would edge aside Singapore,
and yet Indonesia was only still in 11th position last year.
Based
on the report there were two main factors which made Indonesia the main
preference of international investors, edging Singapore aside. The main factor
was that Indonesia’s market was growing fast, being the biggest market in
Asean, propelled by growing middle class and increased purchasing power. The
second factor was the adverse economic condition in America and Europe which
never seemed to end, making investors turn their attention to the Pacific area
including Indonesia.
Business News - January 18,2013
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