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Indonesia housing price index among best in Asia Pacific
Publication Date : 18-06-2012
Indonesia remains the star performer in Southeast Asia on property performance due to stable price growth in almost all segments of the housing market, according a survey conducted by property consultancy Knight Frank.
The survey indicated that Indonesia’s housing price index rose 3.4 per cent year-on-year (yoy) and 0.8 per cent quarter-on-quarter (q-o-q), and was ranked sixth, coming in behind Malaysia, Hong Kong, South Korea and New Zealand.
Knight Frank said that the ongoing crisis in Europe would have negative implications in most of Asia and the Pacific, which would in turn affect housing markets until the end of this year.
The firm predicted that prices in Malaysia would remain steady in coming months with the possibility of a modest decline in 2012. China would see declining prices this year due to lending restrictions and additional taxes, it said.
However, due to stable economic growth, manageable inflation and emerging middle class, Indonesia would see housing prices increase this year, the firm said.
The Knight Frank Global House Price Index, which monitors housing price indices in 53 residential markets across the world, said that the positive increase in housing prices in Indonesia was backed by increased earnings and urbanisation.
Rental apartments located in the Sudirman Central Business District in Jakarta had an average yield of between 8 per cent and 11 per cent in the first quarter, while rental home yields ranged from 4 to 6 per cent, the property consulting company said.
Knight Frank senior research manager Hasan Pamudji said Indonesia was expected to continue to experience strong demand, although the new minimum down payment rule of 30 per cent for mortgage loans coming into force in June and the government’s decision to pull the plug on the FLPP (Housing Liquidity Facility Loans) programme for housing under 70 square metres could affect performance, particularly in middle to low end segments.
“The new policy on down payments will affect the purchasing power on property for the middle and upper class. However, the incentives and credits offered by developers will help them to buy,” Hasan said.
“Therefore I think the down payment regulation won’t be too significant in hampering the growth of property demand,” Hasan said on Sunday.
The research by Knight Frank also showed that the middle and upper market in Indonesia showed higher performance compared to property demand in general and most of property developers still saw bigger opportunities in luxury homes priced up to 2 billion rupiah (US$213,219).