The market is expected to continue to shift due to a number of influencing factors.
Sentiment is strong for the property market this year. In fact according to the Savills’ forecast that this could be a bumper year with a record number of units being added to existing stock. The real estate firm predict that 32,000 units will be completed in Greater Jakarta. Should this be the case, then this will be the highest number since 2012. They also expect a very active year in 2018 too. Resulting in total stock increasing by 50 percent over the next two years.
This increase of supply shows the positive attitudes of developers. They have noted that Indonesia’s population is becoming wealthier. Meaning that there is more money to inject into property not to mention higher aspirations out of the type of property they wish to own. Investors are also being lured in with attractive financial appeals. These include low interest rates, and the required deposit being reduced from 20 to 15 percent as implemented by the Bank of Indonesia in August 2016.
The government have also been playing a role too. Wanting to promote apartment living, they have introduced appealing taxes and loan policies. This is resulting in more of the population opting to live in apartments, a more affordable option than landed houses. Aside from these influencing factors, demand will be propelled even further due to decreasing supply of land. This will likely force people into vertical living.
Due to the changing purchaser profile the market is becoming more diversified to meet demand. The lower-middle and mid-end of the market has historically been the focus of attention, however this is about to change. Savills forecast that the higher tiers of the market making up nearly a third of all supply. Therefore developers need to adapt accordingly to satisfy this shift.
