House price growth in major Indonesian cities
Research and Markets has announced the addition of the “Indonesia Property Industry 1H12″ report to their repertoire. The report noted that Indonesia’s overall property sector experienced positive growth, with residential and office sectors enjoying significant growth. Despite pressure caused by the prolonged economic crisis in the U.S and Europe, the Indonesian economy still experienced a 6.5 percent growth, coupled with increased foreign direct investment. As well as boosting domestic demand, the strong macroeconomic indicators have secured developers’ confidence to continue developing property projects throughout Indonesia. Consequently, Jakarta has experienced a growth in the supply of new departments, along with higher rates of apartment occupancy.
The property research firm Knight Frank has revealed that it expects the property market in Indonesia to remain steady on the back of strengthening purchasing power. Due to controlled inflation, a rising middle income segment and stable economic growth, it is expected that Indonesian property prices will continue to grow.
According to the report, a survey conducted by Bank Indonesia revealed that the price of houses in fourteen major Indonesian cities grew by 3.6 percent year-on-year. That said, in comparison to the 1.2 percent growth experienced in Q4, housing price growth did slow to 0.8 percent.
This was reflected in the statistics released concerning the Indonesian property development giant, PT Bakrieland Development Tbk, the first company to develop the largest superblock City Property project in Jakarta, Rasuna Epicentrum. For the fiscal year that ended in December , the company’s revenue increased 47.5percent year-on-year to IDR2.02 trillion (US$214.12 million). Shortly afterwards in Q1 , the company’s revenue decreased 6 percent year-on-year to IDR400.65 billion (US$42.4million), while net loss totaled IDR49.87 billion (US$5.2 million).
Due to the global economic slowdown and the crisis still going on in Europe, it has been estimated that Indonesia’s economic growth will be in the range of 6.3 to 6.7 percent.