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Economic sentiments weigh down luxury condominium sales in Jakarta
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Apartment complexes stand among office buildings in Jakarta. (Tempo/Tony Hartawan)
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conomic sentiments, such as low gross domestic product (GDP) growth, currency volatility and luxury tax issues posed hurdles for sales of residential condominiums in Jakarta last year, according to a major property consultant.
Jones Lang LaSalle recorded only 5,450 condominium apartments sold in 2016, decreasing by more than half compared to around 12,000 in 2015.
Jones Lang LaSalle research head James Taylor said customers were holding back on purchases, not because they did not have money, but because the economic outlook was weighing them down.
(Read also: Sun to shine on Greater Jakarta property market)
"Since the middle of 2015, residential sales were weak, the luxury tax [issue] had been challenging and the last quarter of 2016 was the bottom of the market," he said at a property outlook event on Wednesday.
Only 1,307 condominium apartments were sold during the fourth quarter of 2016, compared to 3,000 units in the same period of 2015.
Developers responded to weaker sales by slashing their project numbers, and only 1,249 units were launched in the fourth quarter of 2016.
Data shows that the average number of new condominiums launched per quarter during 2015 and 2016 was 1,840 apartments, as opposed to 2,940 apartments per quarter in 2013 and 2014.
In 2017, Jones Lang LaSalle expects condominium sales to rebound, supported by a more stable rupiah and improving economy.
However, sales of luxury apartments above Rp 55 million (US$4,120) per square meter will remain weak due to lingering issues such as the 20 percent luxury tax and foreign ownership. (tas)
