TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
House prices to cool ‘briefly’ on high rates, low spending power
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
A residential neighborhood near the city center in Jakarta is pictured on Dec. 2, 2021. (AFP/Bay Ismoyo )
H
ouse price growth has slowed down in Jakarta and other cities as high interest rates and weak purchasing power take a toll on the market, but experts view the slowdown as temporary and say the trend continues to point upward, to the dismay of would-be home buyers.
“There is indeed a decline in sales per project, but we don’t think the market is sluggish,” Cushman & Wakefield Indonesia strategic director Arief Rahardjo told The Jakarta Post on Thursday when asked about the impact of elevated borrowing costs.
Transaction numbers had dropped in the first half of the year, he contended, asserting however that demand for residential property in the primary market—new homes constructed by real estate developers—remained robust, with the total value of transactions staying higher than in previous quarters because of high project prices.
Demand growth for landed houses in Greater Jakarta had decreased in the first half of the year from 1.96 percent to 1.31 percent, according to the property consultancy’s data.
The average monthly absorption rate per estate was 13.6 units, representing a year-on-year (yoy) decline of 30.5 percent, with average absorption value per estate standing at Rp 33.3 billion per month, while the average transaction value per unit rose to around Rp 2.45 billion, an 18.4 percent increase yoy, signifying that more expensive properties were generally more in demand.
Though he did not predict a decline of the purchasing power in the market, Arief cautioned that the increase in value-added tax (VAT) by one percentage point to 12 percent at the start of next year would make life harder for consumers considering purchasing a home.
“It will definitely add to the burden of home buyers.”
