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Jakarta Post

Expatriate housing: Strategically located, but far more expensive

  • The Jakarta Post

    The Jakarta Post

Jakarta   /   Mon, March 17, 2014   /  12:16 pm
Expatriate housing: Strategically located, but far more expensive

Home sweet home: Two women walk through the gate of the Bellezza apartments located in Permata Hijau, South Jakarta. Rent for apartments located in expatriate areas such as Permata Hijau has increased by between 10 percent and 12 percent this year, according Colliers International Indonesia. JP/R. Berto Wedhatama

Although modern accommodation facilities have been mushrooming in almost all parts of Jakarta, the rents charged for them continue to rise too, especially for those located in areas popular with expatriates.

Rents for houses and apartments located in so-called expatriate areas such as Pondok Indah, Kebayoran Baru, Permata Hijau, Kemang, Cilandak, Cipete and Pejaten, all in South Jakarta, increased between 20 and 40 percent, compared to the previous six months, according to a survey conducted by property consulting firm Colliers International Indonesia.

The rent for three- to five-bedroom houses in areas popular with expatriates can be up to US$15,000 per year, with the cheapest in Cilandak, South Jakarta, being around $2,000.

Meanwhile, the rent for two- to four-bedroom apartments in these areas ranges between $1,500 and $6,800. The most expensive apartments are located in Sudirman, South and Central Jakarta, while the cheapest are in Kemang and Cilandak, both in South Jakarta.

Colliers said that rental terms had also changed as landlords were now demanding a minimum of two to three years'€™ rent in advance, as compared to just one year previously.

At present, it is hard to find landlords, who are willing to negotiate a one-year lease on a house, the survey found.

The company said that quite a few tenants were shocked by the significant increase and were being forced to move to smaller, older properties or those not located in prime locations.

According to Colliers, although multinational companies typically have an allowance for annual rental increases, few are prepared or willing to accept such steep rent increases.

Expatriate families living in those areas agree that the rents are quite high, especially for properties in strategic locations and close to international schools.

Danielle Taylor, a housewife who has been living in a housing complex on Jl. Benda located in Kemang, South Jakarta, with her husband and three children for about 18 months, had to take a lease on their house for a minimum of two years.

Fortunately, Taylor said, her husband, who works for a multinational corporation, received a housing allowance from the company. Prior to moving to Jakarta, she said, she had been living in Balikpapan, East Kalimantan, for several years.

Taylor said it was not hard to look for a house in Jakarta because she had friends living in the city who referred her to several suitable areas.

However, with her three children still in elementary school, she said the house located in the Kemang area, which is close to several international schools such as Sekolah Pelita Harapan International, the Australian International School and Jakarta International School, was just right.

'€œThe house is also close to my husband'€™s office,'€ said Taylor.

Taylor, however, is one of the lucky few having found her ideal home relatively easily; close to international schools as well as her husband'€™s office.

Colliers International has found that land in Jakarta is becoming increasingly scarce and prices have soared uncontrollably, making it increasingly rare for a house to be vacant for more than a month before a new tenant moves in.

Moreover, landlords have become confident enough to raise rents by 20 to 40 percent, some have even gone as far as raising rents 50 to 60 percent, especially in areas such as Menteng in Central Jakarta, Permata Hijau and Kebayoran Baru, locations that live up to expatriates'€™ standards but which have limited availability.

Liana Engie, a development officer at Universitas Siswa Bangsa Internasional (USBI), a university established by the Putera Sampoerna Foundation (PSF), chose to live in an apartment instead of a house because most rented houses in Jakarta come unfurnished.

'€œAlthough initially I preferred to live in a house rather than an apartment, I didn'€™t think it would be worth it to buy furniture because I thought I would only be living in Jakarta for a year or two,'€ says Engie, who has now been living in the city for almost two years.

Her current apartment, she said, was already furnished when she moved in.

Engie currently resides in Taman Rasuna Apartments in Kuningan, South Jakarta, which is a short taxi ride from her office in Pancoran, also in South Jakarta. Previously, she had lived in an apartment in Kalibata, which was a short walk from her office but decided to move due to the small space and the unbearable traffic.

She said that it took her three to four weeks to find her current apartment, adding that it had not been hard to look for a place to live because, much like Taylor, Engie had received help from her friends who referred her to several real estate agents.

Apartments in areas primarily inhabited by expatriates also experienced rent hikes in 2013, albeit not as significant as those for houses.

Although service charges vary from building to building, some apartments, Colliers found, have given notice to their tenants that service charges will increase by up to 13.5 percent.

'€œI'€™ve been living in Taman Rasuna for almost a year, and I had to pay one year'€™s rent up front according to the contract, luckily service charges had already been paid by the owner [of the apartment]. I will soon have to renew my contract, I hope there won'€™t be an increase in rent,'€ says Engie jokingly.

Although this year there will be many apartment projects completed, apartment building owners remain optimistic about maintaining rent levels and sustaining high occupancy rates. (dwa)

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