Completion delays still haunt Jakarta’s apartment market
The cumulative apartment supply only grew 0.1% to 219,859 units in Q3.
The overall apartment market in Jakarta is still blighted by completion delays. Up until 3Q 2022, data from Colliers revealed that cumulative supply of apartments in Jakarta reached 219,859 units, a modest increase of 0.1% QOQ or 1.3% YOY. The only addition this quarter came from a middle-upper class project, Southgate Residence (Prime tower) in South Jakarta, which contributed 189 units.
“We expect to see another 21,319 units added from 2022 to 2025, and about 28% are scheduled for completion in 2022. Our recent survey revealed that about 37% of the total projected supply in 2022 will be potentially shifted to 2023 or 2024, due to construction targets not being met,” the report added.
Here’s more from Colliers:
New supply will be mostly located in South Jakarta and East Jakarta over the next three years. A lack of development in the CBD is due to the scarcity and the high price of land driving investors and end-user buyers to consider apartment projects outside the CBD, including the eastern area of Jakarta. A massive infrastructure development that includes LRT and a new toll road should also play a pivotal role in priming the fringe area for development.
In the current slow-moving situation, we see no new projects being launched or introduced this quarter. A scaling back of new launches suggests that developers are waiting for the “right time”, considering the rising prices of raw materials and the impact this could have on an increase in the cost of construction. Hence, developers might need to manage their pricing strategies as the market is now more price sensitive than before.