JLL said at a virtual press briefing on Wednesday that the residential property market recorded a supply of 16,000 new houses in 2020, the highest since the consultancy started collecting data in 2017. Residential sales reached 13,000 houses with a sales rate of 72 percent, higher than the 63 percent rate for condominiums in Greater Jakarta.

The majority of houses sold in 2020 fell within the Rp 600 million (US$42,901.32) to Rp 1.3 billion price range, had two to three bedrooms and were located in the satellite city of Tangerang, Banten province.

JLL head of research Yunus Karim said developers with broad tracts of land shifted their focus to building residential homes, including by partnering with foreign developers.

“Landed houses have been [resilient to] the pandemic because Indonesia has socioeconomic potential that lures both domestic and foreign investors to develop landed houses here,” Yunus told Wednesday's press briefing.

“This is also because buyers with usage intent, or end users, are more active than [buyers] with an intention to invest,” he added.

The public health emergency has negatively affected the domestic property market, with the latest Bank Indonesia survey showing that combined sales of small, medium and large houses slumped 30.93 percent in the third quarter last year, a sharp contrast from third-quarter growth of 13.95 percent recorded in 2019.

Respondents cited the prolonged health crisis and the government’s large-scale social restrictions (PSBB) as the primary deterrents to purchasing new homes.

The government recorded 8,776 new COVID-19 infections on Wednesday, bringing the nationwide tally to 1.18 million cases, even as it enforced the micro public activity restrictions (PPKM Mikro) from Feb. 9 to 22. The new policy is more lenient than the original PPKM, with one of the more significant changes being that it extends the operational hours for shopping malls and dine-in restaurant services by an additional two hours to 9 p.m.

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Around 16 percent of respondents cited high mortgage rates as a deterrent, although mortgage rates had fallen to 8.63 percent the third quarter from 8.85 percent in the second quarter.

The survey also showed that residential property prices grew at a slower rate of 1.51 percent year-on-year (yoy) in the third quarter, compared to 1.80 percent growth in the same period in 2019. The central bank forecast growth of 1.29 percent yoy for the fourth quarter of 2020.

Chairman Totok Lusida of Real Estate Indonesia (REI) said Wednesday that the Greater Jakarta housing market was spurred by millennial and middle-class homebuyers, with some shifting from buying apartments due to coronavirus concerns.

“Homebuyers have been concerned since the COVID-19 outbreak. [...] Using the same elevators, living in the same building,” Totok told The Jakarta Post in a phone interview. “But [apartment] managers have actually instilled the health [protocols]. So, I hope by the midterm this year, apartment [sales] will start returning to normal.”

Totok’s statement corresponds with a 2020 survey by real estate portals 99.co and Rumah123.com, both part of Singapore-based property marketplace 99 Group, which found that 76 percent of respondents were still looking to purchase residential property. One-quarter of respondents, the majority of who were Greater Jakarta millennials, were searching for houses in the Rp 250 million-Rp 500 million and Rp 1 billion-Rp 2 billion price ranges.

In the commercial market, JLL said the health crisis caused a 34,000 square-meter (sqm) contraction last year in the demand for Jakarta retail space. Correspondingly, the occupancy rate of retail property fell to 87 percent in 2020 from 90 percent in 2019.

The consultancy forecast a further decline in occupancy rate to 86 percent this year, as it expected the retail property market to become oversaturated.

Despite the COVID-19 restrictions, Jakarta’s retail property market saw 25,400 sqm of new shopping centers last year, with the new supply of shopping centers forecast to reach around 130,000 sqm this year.

“We are still seeing new stores opening in shopping centers,” said Yunus. “We expect the food and beverage, beauty and fast fashion sectors to remain active this year, while the entertainment industry may still need to wait for the situation to improve before resuming [full] operations.”

In manufacturing, Statistics Indonesia (BPS) data showed that the food and beverage industry grew 1.66 percent yoy in the fourth quarter of 2020, while the textile and garment industry nosedived 10.49 percent yoy in the same period.

According to Alphonzus Widjaja, who chairs the Indonesian Shopping Centers Association (Appbi), the shopping center occupancy rate fell by 10 to 20 percentage points to reach between 70 percent and 80 percent, and hovered at that level until February 2021.

“In shopping centers, it is normal for tenants to come and go,” Alphonzus told the Post in a phone interview on Wednesday.

He explained that the decline had occurred because many tenants did not apply for an extension after their lease periods had expired, and some tenants even prematurely terminated their leases because of severe business impacts from the coronavirus-induced downturn.

“But there was a difference. In normal times before the pandemic, there were many successors if a tenant did not extend their lease. During the pandemic, there were almost none,” he said.