Indonesian homebuyers still “extremely cautious” despite government incentives
There were no new projects launched in Q1 as developers focus more on selling existing ones.
Overall demand for condominiums in Jakarta remained slow in the quarter as buyers are still extremely cautious. In order to stimulate the residential market, the government unveiled two incentives: VAT rebates for built residential units priced up to IDR 5 billion (USD 0.35 million), and the relaxation of LTV regulations. These moves have given a positive boost to the affordable landed housing market.
According to JLL, since international arrivals restrictions were still in place, demand for serviced apartments remained limited – a similar trend to last year when the pandemic first hit.
Here’s more from JLL:
1Q21 witnesses no new project launches
No new upper-grade projects launched in the quarter as developers are more cautious; hence, the strategy is to withhold the launch of any new projects until the market situation improves.
No new serviced apartment projects were completed in 1Q21. There are two projects expected to complete this year in the CBD area; namely, Oakwood Serviced Apartment @ District 8 and Somerset Sudirman Jakarta.
Prices remain unchanged
Condominium prices have remained relatively flat for some time. Developers continue to stay focused on attracting buyers by maintaining prices and offering attractive payment schemes.
Serviced apartment rents still reflected negative growth of -0.9% q-o-q.
Outlook: Demand from end-users remains resilient
Demand from end-user buyers remains resilient despite their caution. Both developers and buyers are likely to show increasing interest in areas surrounding public transit, such as the MRT and LRT. Meanwhile, the landed housing market is likely to remain active.
Serviced apartment trends are likely to remain unchanged until the situation improves and the restrictions on international arrivals are lifted.
Note: Jakarta Residential refers to Jakarta's luxury condominium and serviced apartment markets.