Luxury Property Prices Soar in Jakarta as Economy Fires Up Demand
Francezka Nangoy. The Jakarta Globe, Jakarta - 02/02/2012
The value of luxury property in Jakarta increased more than any major city in the region late last year, as the nation’s economic strength boosted domestic demand, Jones Lang LaSalle has reported.
The property advisory firm said Jakarta saw the biggest increase in high-end residential property value in the fourth quarter last year compared to the same period in 2010 among the eight cities in its study.
Of the cities surveyed, only Jakarta and Hong Kong showed substantial increases in value: Jakarta’s property prices rose 14.4 percent and Hong Kong’s 11.7 percent.
Property prices in Bangkok were up 3.6 percent in the fourth quarter last year compared to a year earlier, while Mumbai saw a 1.3 percent climb.
Jones Lang LaSalle’s review defined luxury properties to include apartments, condominiums and detached and semi-detached housing located in traditional prime areas.
Strong economic growth, estimated at 6.5 percent in 2011, and increasing purchasing power were the reasons for the price surge in Jakarta, the property firm said.
“This trend and demand for well-located downtown apartments in Jakarta will continue,” said Luke Rowe, a senior technical adviser at Jones Lang LaSalle Indonesia.
“Jakarta’s rising land prices and rental prices in both the commercial and residential sectors are set to continue.”
Last week, Anton Sitorus, head of research at the firm, said sales of strata condominiums last year in Jakarta doubled from 2010, to about 8,500 units.
Of the total 76,300 condominiums in Jakarta’s market, Anton said the take-up rate was 91 percent by the end of 2011.
He said this significant increase in sales last year was unlikely to be matched, with condominium sales growth predicted at 15 percent this year.
Meanwhile, prices in Singapore and Kuala Lumpur were relatively flat in the final quarter of 2011, while prices in Beijing and Shanghai were lower, a trend that is likely to continue.
“We think prices in China will soften further, though developers are likely to introduce only moderate price discounts due to limited supply in prime locations,” said Jane Murray, head of Asia-Pacific research at Jones Lang LaSalle.
“Prices in Hong Kong and Singapore are expected to decline over the year due to a projected rental correction, tighter credit and government measures; that said, generally low holding costs will limit the extent of price correction,” she said.