“Apartments located closer to TOD points are more desirable than similar residences in the area that are nowhere near transit points,” Cushman & Wakefield strategic director Arief Rahardjo said in a media briefing in Jakarta on Thursday.

Arief explained that public enthusiasm for apartment development at TOD points coincided with the latest expansion of public transit facilities. He pointed to the recent development of transportation systems, including the new Greater Jakarta LRT and the Jakarta-Bandung high-speed railway, which cater to the eastern and southern parts of Jakarta.

With commuters increasingly prioritizing convenience and connectivity, housing within TOD areas has become an enticing prospect for urban dwellers. He said this aligned with developers' interests as they kept building within a limited radius around transit points.

However, “if the [development of] public transit is hampered and unclear, inhabitants as end users will think twice about choosing the property in that area, as they still have to rely on private transportation,” warned Arief.

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As urban populations continue to grow, so does the need for efficient and sustainable transportation. In response, building within an 800-meter radius of public transit points has emerged as a popular urban development strategy to integrate transit functions with activities, buildings and public spaces, with a high intensity of space utilization, according to the Jakarta Property Institute (JPI).

Colliers Indonesia head of research Ferry Salanto shared on Thursday that, “apartments adjacent to TOD points are competitive.”

He also explained that TOD apartments had begun to target the lower-middle class as the largest market for buy-to-let apartments and said consumers would be more confident buying apartments at TOD points once the overall transit system was up and running.

Jones Lang Lasalle (JLL) head of research Yunus Karim said proximity and accessibility of public transportation had become crucial factors in the market, with homebuyers of the millennial generation showing a strong preference for apartments located near public transit hubs.

“[Millennials] are particularly keen on apartments at TOD points and are more willing to compromise on space [in return],” Yunus said at a media briefing in Jakarta on Tuesday.

JPI executive director Wendy Haryanto concurred. Based on research conducted by the institute, 54 percent of respondents aged 19-29 chose downtown apartments for their strategic location, lower transportation costs and commutes.

Wendy told The Jakarta Post on Thursday that the challenge at present revolved around the scarcity of apartments catering to middle-income individuals, despite the sustained interest and escalating demand in this segment.

Moreover, she contended that a mismatch existed between the current supply of apartments and the capacity of middle-income earners to actively engage in the property market.

Indonesia Property Watch executive director Ali Tranghanda told the Post on Friday that prices of urban apartments near TODs, starting from Rp 600 million (US$39,776), exceeded many middle-income earners’ purchasing power.

“There are apartments in the Rusunami [buildings of low-cost condominiums] price range, but not many. Currently, the buyers are mostly [buy-to-let] investors,” Ali added.

In other words, as people showed growing interest in TOD-concept apartments, buyers found themselves overshadowed by buy-to-let investors, according to him, leaving many end-users stuck with only the option to rent.

But Ali cautioned that it was “too early” to assess the full impact of public transit on TOD apartments. “It is still unclear whether [TOD apartments] will be for commuters, because many are still under construction.”

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According to various property consultancies, apartment sales have remained stagnant since the 2019 pre-pandemic level.

Cushman & Wakefield’s second-quarter report for Jakarta finds that lower-middle class projects dominated overall transactions, comprising 70.2 percent of the total. In the upcoming quarters, the lower-middle class is still expected to dominate the market.

The current quarter witnessed the highest occupancy rate since the pandemic at 57.8 percent. Cushman & Wakefield’s Arief explained that, in the pre-pandemic period, occupancy never exceeded 60 percent, largely due to investment transactions dominating property purchases.

Meanwhile, JLL has observed a decline in demand up to this date, with apartment sales limited to projects nearing completion and located in prime locations

The buy-to-let investors, however, have adopted a wait-and-see stance as they hedge their bets on a more favorable market situation before making further purchases.