Jakarta market matures
Significant gains are to be made in the property market in Jakarta, especially
with early participation – that’s one of the messages in the latest
property market report from Jones Lang LaSalle
With a population of 26.5
million people, Jakarta is a
heaving mega city – one that
is experiencing growing pains,
thanks to an acknowledged
lack of infrastructure.
Although these problems
are being addressed, there is
still much to be done. However, the latest property market
report from Jones Lang LaSalle
Jakarta notes that the traffic snarls and transportation
64
difficulties have created a
soaring demand for strategically
located
vertical
residential accommodation.
Head of Residential Project
Marketing at Jones Lang
LaSalle, Luke Rowe, says apartments used to be considered
second-class accommodation
in comparison to freestanding
houses. However, in modern
Jakarta, apartments are highly
sought after, with 70% of
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projects sold within six months
of launch, and more than 90%
sold out before completion.
“The market is maturing
and investors recognise that
early participation will equate
to significant capital gains
once a project reaches completion,” Rowe says. “This is a
huge and important trend for
the industry as a whole. This
year it is expected that at least
14,000 apartments will sell in
greater Jakarta, which means
the number being sold is growing by about 20% per annum.”
However, Rowe says Bank
Indonesia has taken some
cooling measures to prevent
the market overheating. These
include changing the loan-tovalue ratio of the first property
purchase to 30% equity, with
40% equity required for a
second property and 50% for
a third. Banks will also only