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roperty developers are moving to cater to the growing market in middle- and lower-segment housing as demand for upscale residences drops on this year'€™s slowing economy.

Association of Housing Development in Indonesia (APERSI) secretary-general HM Hidayat said that while demand for high-end housing had declined steeply, that for lower- to mid-end housing had almost doubled.

'€œMany developers who used to target the upper segment are now going after the mid- to low segment. That'€™s the trend,'€ Hidayat told the press on the sidelines of a Jakarta Property Week event on Thursday.

According to Hidayat, a total of 250,000 houses were built last year for the upper as well as the middle and lower segments. Meanwhile, as of July this year, 400,000 houses had been erected for the middle and lower segments only, many as part of the government'€™s program to build a million homes.

Initially, developers under the association were to build 65,000 houses this year. However, with higher demand, the association has increased the target to 150,000 houses.

This trend, Hidayat said, would probably offset slowing sales of high-end houses, adding that the growing demand for middle- to lower- segment houses was also driven by a backlog of housing needs standing, according to the Public Works and Public Housing Ministry, at approximately 13.5 million units.

Government incentives for the development of housing for the poor under the one million house program launched in April has also contributed.

The statement corroborated data from Indonesian Property Watch (IPW) showing that of total property sales in Greater Jakarta of Rp 2.5 trillion in the first quarter of the year, upper-segment housing declined from 45 to 15 percent.

Meanwhile, the sales composition of the mid-segment, priced between Rp 500 million and Rp 1.5 billion, increased to 45 percent from 30 percent, while the low segment, priced below Rp 500 million, increased from 25 to 40 percent.

The economic slowdown has hit the property industry hard, with sales of housing in the second quarter growing 10.84 percent, compared with 26.2 percent in the first quarter, according to a Bank Indonesia Residential Property Survey. Indonesian Real Estate (REI) previously reported a 50 percent sales decline over the year.

Tulus Santoso, director and corporate secretary of Ciputra Development (CTRA), the holding company of major developer Ciputra Group, said that the company was focusing on developing the mid- to low segment this year, as these segments were deemed more stable in the current economic condition than the upper segment. (fsu)