P

roperty industry players have been told to be extra vigilant in doing business in 2015. Intensifying competition and a weakening market are two factors that property business players need to consider seriously this year.

Indonesian Property Watch (IPW) Ali Tranghanda warned business players of at least four challenges that the property sector was likely to face this year.

'€œThe first one is related to taxation in the property sector. This thing will more or less disturb the purchase of property, particularly that by the middle-upper economic bracket. Second, turbulent political and economic conditions cause a lot of people to put off their decision to buy property,'€ he said.

He added that the third challenge had to do with regions where property prices were being adjusted due to sky-high prices. The last challenge relates to the fact that there a number of developers suffering from failed projects. Many of these developers carry out these projects without really assessing potentials and risks.

To respond to the four challenges and help the property sector sustain itself, Ali said that the government needed to realize its infrastructure programs.

'€œAside from that, IPW also reminds the government about the importance of forming a land bank, which will be used as an instrument to control land prices. Without any clear land bank regulations, land prices will be uncontrollable and the government'€™s 1,000 homes [for the underprivileged] will not be realized in an optimum way,'€ he concluded.

Expanding to secondary cities

Another challenge faced by the property industry is the increasing competition among developers in Jakarta.

Secondary cities adjacent to the capital, namely Bogor, Depok, Tangerang and Bekasi, however, are starting to show their potentials as the future hubs of property development.

Highly perceptive of the great potentials, some developers have already ventured into the satellite cities. One of the most recent is PT Era Graha Realty (ERA Indonesia).

ERA Indonesia president director Darmadi Darmawangsa said that this year, the company was focusing its developments in the suburban areas, the potential of which is currently on the rise.

'€œCurrently, Indonesia is going through dense and rapid development. All the sectors in Jakarta are very lucrative. As a consequence, property prices in the capital have been very high. This is why we consider the secondary cities favorable for various property projects,'€ Darmadi said.

The government has also been supportive in capitalizing on the secondary cities'€™ potentials. This can be seen from the many ongoing infrastructure projects, including building toll roads to connect the cities to the capital.

According to Darmadi, people will opt to live in strategic locations that are close to their workplaces with sufficient public transportation services. (JP)