Transacted units are mostly absorbed by end-users who continue to dominate the buyers’ profile during the review semester, accounting to 78% of the total transactions. As for the price segment, the Middle and Lower-Middle segments are still the most coveted segment, with share of 33.3% and 23.3%, respectively, which are targeting end-users of young family and singles looking for their first home.
Supply: More Upper Segment Offered in the Market
With more toll road opening and future linkage prospect to other road networks, two new estates coming from Tangerang and Depok, respectively,enters the market during the review period and brought a total of 729 new units.
The sum contributes to a total of 6,816 units of new supply during this semester, a rise of 25% HoH. Middle segment units dominated the supply, which makes 34.0% of the total proportion, and followed by Lower- Middle segment at 26.2%. The number of units offered within Upper price segment has continued to increase during the review period as well, with a total of 1,265 units (or a growth of 17.7% HoH), sharing 18.6% of the total new supply in H2 2021. Compared to the early days of pandemic, more upper segment units are offered in the market, reflecting developers’ growing confidence in the general economic improvement.
As nation-wide developers are pressed for time to deliver units on-time for VAT incentives program, building materials continue to rise, affecting the overall average sales price to grow around 3.51% YoY. On the other hand, land price growth is still observed growing conservatively at around 2.7% YoY, with the average land price recorded at Rp 11,781,066,- per December 2021, as part of an effort done by the developers to maintain an affordable price for their products.
OUTLOOK
The year 2022 is forecasted to offer both opportunity and new challenge to the property market. On one side, economic condition has been progressing during 2021 with business activities and public adjusting to the “new normal” condition, which is predicted to carry on to the new year. On the other hand, issue on Government’s new policy and worldwide monetary regulation have put developers on alert. Indonesian Government’s plan to gradually increase the VAT, to 11% starting from April 2022, may also affect public’s overall purchasing power, including to property sector.
Aside of that, the impact of the planned new US monetary regulation on Indonesia’s reference interest rate is currently being observed, since the policy may affect both business-owners and general public, particularly landed- residential customers which are heavily reliant on mortgage facility.
Government’s VAT incentive program is planned to be extended until September 2022 with a different scheme, where incentive is decreased by 50% from its current scheme. With developers focusing on building construction to meet on-schedule delivery deadline, building price is forecasted to continue increasing in the next semester.
Minimum DP of around 5-10% for first mortgage is expected to still be required by many developers as a token of buyers’ initial commitment, which makes Central Bank’s latest LTV/FTV relaxation which allows for 0% DP for all house mortgage facilities still not effectively practiced.
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