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Demand for high-rise residences soars
Demand for condominiums in Jakarta and nearby areas has grown in the past few years due largely to robust economic growth as well as the scarcity of land in the capital city
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emand for condominiums in Jakarta and nearby areas has grown in the past few years due largely to robust economic growth as well as the scarcity of land in the capital city.
In the first quarter of 2013, the sales rate of condominiums hit 96.2 percent ' the highest cumulative level in a decade, according to property consultant Cushman & Wakefield Indonesia.
'The sales of condominiums in Greater Jakarta are expected to rise in the near future as there is a high demand from both investors and end-users. Middle-class condominiums still dominate sales and account for about 57 percent of the total sales,' head of research and advisory Arief Rahardjo told The Jakarta Post recently.
Middle-class properties are those with a price tag of between Rp 10 million (US$1000) to Rp 15 million per square meter.
The total cumulative supply of condominiums in the capital city was 108,769 units as of March this year, a rise of 21.2 percent on a yearly basis.
The low availability of land to build houses, with consequent high prices, has driven buyers to choose condominiums. In addition, people are choosing condominiums as they want to be closer to their work to avoid the city's ever-worsening traffic jams.
The high demand can be seen in the rate of pre-sales ' which represent projects that have been announced to the market but yet to begin construction ' that was recorded at 61.2 percent throughout the first quarter of this year.
As many as 7,056 new condominium units were launched on the market during the first three months of the year, with most of them located in South Jakarta.
Pre-sales activity in January 'March 2013 was also dominated by middle-class projects, which accounted for 66.6 percent of the total proposed new projects.
'The fuel-price hike will increase the cost of construction and affect people's purchasing power. But, we have not seen the impact of the price hike in the condominium sector at the moment,' Arief said.
He said, however, condominium prices continued to increase simultaneously with the increase in land prices. In the first quarter of this year, the average price of units in the Central Business District (CBD) was Rp 26 million per square meter, an increase of 5 percent on a quarterly basis.
Meanwhile, the average price in the prime areas, such as Kemang and Pondok Indah, in South Jakarta, was Rp 24.2 million per square meter, a rise of 3.5 percent from the fourth quarter of 2012.
Contacted separately, publicly listed property developer PT Agung Podomoro Land (APLN) corporate secretary Justini Omas said the firm's condominium projects like Green Bay Pluit in North Jakarta and Parahyangan Residences in Bandung, were quickly absorbed by the market.
'As soon as we introduced the projects to the market, they were absorbed very quickly, particularly by young families and those who invest in property. We now only have a few units left in Green Bay and Parahyangan,' Justini said.
PT Ciputra Property director Artadinata Djangkar said the first two condominium towers in its latest superblock project, Ciputra World 2 in the Kuningan area, had almost sold out.
