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Jakarta Post

New strategy needed to deal with sluggish property market

(Antara/Yudhi Mahatma)The economic slowdown and other macroeconomic factors have negatively affected the property market in Jakarta over the last several quarters

Ayomi Amindoni (The Jakarta Post)
Wed, October 7, 2015

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New strategy needed to deal with sluggish property market (Antara/Yudhi Mahatma) (Antara/Yudhi Mahatma)

(Antara/Yudhi Mahatma)

The economic slowdown and other macroeconomic factors have negatively affected the property market in Jakarta over the last several quarters.

JLL Indonesia head of advisory Vivin Harsanto said the combined impact of new policies introduced to combat the economic slowdown and the macroeconomic conditions had forced property developers to develop new strategies and review their development plans.

"Measures that should be considered include adjusting the type and quality of products, pricing strategies, incentives and the method of payment," said Vivin in a Jakarta Property Market Update held by JLL Indonesia on Wednesday.

She said that property developers also needed to consider project funding strategies through cooperation with local and foreign investors.

According to Vivin, one of the policies that had affected the property market was Bank Indonesia'€™s policy requiring transactions to use the rupiah.

"As a result rental prices in Central Business District (CBD) office buildings during the third quarter should be adjusted," she said.

In the third quarter, rents edged down by 1.6 percent quarter-to-quarter in rupiah terms in the premium market. Meanwhile, rents edged down by 8.3 percent quarter-to-quarter in US dollar terms in the premium market.

JLL head of markets Angela Wibawa added that prices in areas outside the CBD were relatively stagnant due to an increase in supply. "In this situation, developers have to keep their tenants or extend and provide competitive rental rates," she said. (bbn)(++++)

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