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.
Boom in luxury properties for the super rich
High life: With 12 limited edition one-bedroom loft pool villas, The Stairs in Bali is for the discerning few
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!
High life: With 12 limited edition one-bedroom loft pool villas, The Stairs in Bali is for the discerning few. (Courtesy of The Stairs Bali) (Courtesy of The Stairs Bali)
H
span class="caption" style="width: 454px;">High life: With 12 limited edition one-bedroom loft pool villas, The Stairs in Bali is for the discerning few. (Courtesy of The Stairs Bali)
The promising growth rate of ultra-high net worth individuals in Indonesia is a key factor in the supply of super expensive homes in the country.
Whether it is good or bad news is arguable. But a recent report shows that Indonesia will be home to many more billionaires in a decade, with an expected growth rate of 143 percent.
The number of billionaires in Indonesia is estimated to more than double from 23 in 2013 to 56 in 2023, according to The Wealth Report 2014, released by British-based property consultant Knight Frank. In term of the forecast growth, the second-placed country is India (98 percent) followed by China (80 percent), Ukraine (71 percent) and the Philippines (62 percent).
A billionaire, based on the report, is a person with estimated net wealth of over US$100 million.
The data also shows that Indonesia will have more ultra-high net worth individuals (UHNWIs) and centa-millionaires in the next ten years. An UNHWI is a person who has US$30 million or more in net assets excluding their principle residence, while a centa-millionaire is someone with $100 million in net assets.
It is predicted that the number of UHNWIs in Indonesia will increase to 1,527 in 2023 from 626 in 2013, and those categorized as centa-millionaires will rise to 451 in 2023 from 185 in 2013. In both classifications, Indonesia ranks second after Vietnam, with 166 percent and 167 percent growth rates in each respective type.
The increase in super-rich people in Indonesia is indeed good news for luxury house developers in the country, particularly in Jakarta and Bali, as they possess buying power for such luxury goods as property, jewelry and automobiles.
Another report from the Global Cities Prime International Residential Index (PIRI) has tracked luxury property markets in 30 cities across the globe, listing Jakarta as the world's hottest place for prime real estate in 2013 for the second consecutive year. The report shows that Asian markets, led by Jakarta, saw the highest price growth last year, followed by Auckland, Bali, Christchurch and Dublin.
Compared to any other city, prices for prime real estate in Indonesia's capital recorded a 38 percent increase by the end of 2013 compared to the same period in 2012. Bali ranked third with a 22 percent gain.
The increase in Jakarta was more than double that in second-ranked city Dublin (17.5 percent) and third-ranked Beijing (17.1 percent). The fourth and fifth were Dubai and Los Angeles, with 17 percent and 14 percent hikes respectively.
Other countries listed in the top 10 included Tel Aviv (12.7 percent), Bangkok (12.3 percent), San Francisco (10.4 percent), New York (10.4 percent) and Sydney (9.3 percent).
According to the report, limited supply and very strong demand are factors that are driving Jakarta's luxury property prices higher, even if the Indonesian economy is not as strong as it was perhaps two years ago.
The luxury property market in Indonesia is unique, which is related to snobbery, according to Tommy, an executive of property consultant company PT DKNS. 'Rich people are always looking for the properties with the highest prices. This is about prestige for them, so there's continuous demand for luxury properties as there are super-rich people at most times.'
He added there was almost equal demand for apartments and landed houses in the luxury property market in Jakarta. A property could be classified as luxury because of several factors, but location is a 'must', he said.
In Jakarta, the most famous locations for luxury properties are Menteng in Central Jakarta; Kebayoran Baru, particularly the areas around Jl. Gunawarman and Sriwijaya, South Jakarta; Bukit Golf Pondok Indah, also in South Jakarta; and certain plots in Bukit Gading Villa and Pantai Mutiara in North Jakarta.
'In [terms of] apartments, those categorized as luxury are usually marketed individually to limited potential buyers such as those located in Dharmawangsa and Sudirman Central Business District in South Jakarta,' Tommy said.
He pointed out that an apartment might not be considered a luxury property despite the fact it used expensive imported branded materials, as the developer could allow the owners to make renovations. 'A renovation project can disturb other tenants living on the same [floor or] lower or higher floors. Disturbances surely can't be called luxury living.'
Aleviery Akbar, associate director of property consultant firm Colliers International Indonesia, said that the asking prices of landed house on the Jakarta luxury property market ranged between Rp 80 million and Rp 100 million per square meter. Luxury apartments, meanwhile, which are generally of a size greater than 300 square meters, cost around $5,000-$6,000 per square meter.
'The supply of luxury properties in Jakarta, especially apartments, is always absorbed, with a rate of up to 90 percent due to high demand. But this is also about lifestyle; absorption is traditionally promising,' he said.
