Outlook: Omicron Will Slow Down the Pace of Market Recovery
While the hotel market in the second half of 2021 provides sustainable growth, the increase in Omicron Covid-19 cases in Jakarta which reached 6,000 cases per day by the end of January 2022 is likely to slow down the pace of hotel performance recovery, at least throughout the first half of 2022.
In addition, there are still restrictions on international flights entering Indonesia and Jakarta in accordance with official regulations from IATA and the Immigration Office, making the demand for hotel rooms, especially upscale to luxury hotel segments still soft and suppressing ADR growth.
With the pandemic situation still continuing and complying with the Covid-19 Task Force regulation, hotel operators will determine marketing strategies that can increase RevPAR while still prioritizing health protocols for guests staying at their hotels.
Landed Residential H2 2021
Demand: Overall Healthy Transaction Despite Public Activity Restriction
The implementation of emergency public activity restriction (PPKM Darurat) in the early second half of 2021 had not put significant impact on the overall transactions in H2 2021. Average transacted units during the review semester were recorded at around 27.1 units per month per estate, a rise of 7.6% HoH.
The average sales value also grew by around 16% from last semester, corresponding to around Rp 42 Billion per month per estate. Tangerang remains as the most active submarket among others, holding average take-up of 40.7 units per month per estate, with Bogor- Depok at the second place with 20.8 units per month per estate.
The extension of Government’s Value Added Tax (VAT) incentive program to the second half of 2021 continues to attract inquiries on ready stock units. The program, which offered full VAT waiver for units priced up to Rp 2 Billion and 50% VAT waiver for units priced above Rp 2 Billion up to Rp 5 Billion, applied to units ready to be handed over to buyers in December 31st, 2021 at the latest.
Despite the rising inquiries on units which falls under the program’s criteria, availability of such units are becoming more limited in many estates, since most of their offered units have been sold during their launching period. As a result, indent units continued to dominate the recorded transactions during the review period.
Following a more laxed business activities after the gradual ease of PPKM restrictions, banks continued to gradually relax their mortgage rules and selection of new applicants. However, the impact of credit restructuring which was taken by some debtors during the onset of the pandemic is observed during the review semester, where banks are becoming more careful in accepting new applicants (for second house mortgage) with history of credit restructuring.
Aside of that, Central Bank’s latest Loan To Value (LTV)/Financing To Value (FTV) relaxation which allows 0% Down Payment (DP) for all house mortgage facilities from March until December 2021 has not seen effective, since many estates still require a minimum DP of 5-10% for first-mortgage, and even higher DP for second-mortgage onwards. In this semester, mortgage remains the most-preferred method of payment with 74% of share, while hard cash and cash installment share similar proportion at 13%, respectively.
