BI predicted increasing price of residential property at the secondary market would continue all through the year. To be specific, BI predicted highest price increase would be big type homes [4.44%]. Meanwhile by area the highest increase would be in East Jakarta especially in Pulo Mas district [4.5%]. Other areas of high investment value like Central Jakarta would post price increase of 4% and South Jakarta 3.88%.
According to BI Research, the price increase was on account of shortage of houses which triggered demand for secondary homes all through the year. On the other hand secondary homes were sought after because of the low price, wider land and established communities so the ambience was more pleasant.
Chairman of the Association of Indonesian Real Esatate Brokers Darmai Dharmawangsa stated in Jakarta on Monday [2/10] predicted that property business at the secondary market would post better growth in line with restriction for application of mortgage credit by BI. Dharmadi stated that the new policy adopted by BI would reduce the primary market, which was predicted to be less than the secondary market. “In the next 6 months the secondary market would grow more significantly. The LTV regulation restricted speculators’ movements” Darmadi was quoted as saying.
Darmadi explained in BI Circular Letter No. 15/40 DKMP on the application of Risk Management for banks extending property credit, application for mortgage [KPR] of second house could not be exercised if the house was not physically tangible. It was this physical appearance of house which was the plus point in the secondary market. So far there had been a wide gap between the primary market and secondary market. He showed as an example the price of a certain type of house at the primary market was Rp.1 billion, at the secondary market it could be lower around Rp800 million.
Furthermore he rated that price of houses at the secondary market in favorite location like Menteng Jakarta tend to move up or even over priced. He noted that today price of house, based on land price in Menteng was between Rp70 million to Rp100 million per m2. Compared to price of 3 years ago at Rp30 million per m2. In spite of being over priced they ere selling well. Beside Menteng, the areas being favorite location to seekers of secondary market houses and tend to increase by price were Kebayoran Baru, followed by Pondok Indah.
Beside property of the secondary market, prices were also increasing in subsidized houses. Head of the Supervisory Board of the Association of Residential Developers of Indonesia, Fuad Zakaria stated the increase must happen as building expenses increased. Besides price of land, and inflation, were soaring high. However, sellers were still considering buyers’ purchasing power.
Fuad said that price increase was a pressing need because it was hard to carry on with development if selling price remained as it was today. Even if prices were adjusted to the present condition houses would have to be built in remote areas, far away from the city reasonable because price of land in the heart of the city skyrocketed.
Business News - October 25, 2013