DEMAND: VAT EXEMPTION DRIVES SURGE IN DEMAND FOR EXISTING CONDOMINIUMS
The impact of incentives for full VAT exemption on the purchase of existing condominiums is increasingly noticeable. Sales in the completed projects has almost doubled those in the previous quarter, resulting in a total sales rate of 94.1% (0.3% YoY). Concurrently, the occupancy rate saw a rise of 4.8% from that in the preceding quarter, reaching 63.5%.
Condominiums near universities are experiencing an increase in occupancy rates during the review quarter following the start of the new academic year, as many new students seeking accommodation. Pre-sale transactions occurred mostly in the middle segment projects which represented a substantial 61% of total transactions.
Demand is expected to stabilize throughout the remaining of the year with no significant growth anticipated following the reduction of VAT incentive on completed units to 50% starting July to December 2024.
PRICING: HIGHEST ANNUAL PRICE GROWTH IN THE SECONDARY AREA
The market saw a relatively stable price trend over the review quarter, with a year-on-year increase of 2.3%, reaching Rp 48,800,000 per square meter. In the CBD, average condominium prices stood at Rp 60,000,000 per sq.m, marking a 1.9% increase from that in the previous year, while prime areas recorded prices of Rp51,300,000 per sq.m, up by 1.6% year-on-year.
Secondary area, on the other hand, experienced more significant growth, with prices climbing by 4.8% annually to Rp 35,200,000 per sq.m. in response to the anticipated slow market, price is expected to remain relatively stable throughout the upcoming quarters.
RENTAL APARTEMENT Q2 2024
SUPPLY: ADDITIONAL SUPPLY FROM NEWLY SOLD CONDOMINIUMS
There was no new supply from Serviced Apartment and Purpose-Built Apartment sub-markets identified in the second quarter of 2024. However, the projected opening of Sommerset Kencana in mid July 2024 hints the additional supply from Serviced Apartment sub-sector in the third quarter of 2024.
With no new launch or completion of condominium projects during the review quarter, new addition to the supply came primarily from the newly sold condominium units within the existing projects, in the condominium-for-lease submarket, and the cumulative supply increased by a merely +0.1% QoQ or +3.0% YoY to a total of 179,634 units.
For the remainder of 2024, the rental apartment supply will continue to mainly come from completion of condominium projects and new serviced apartment units in Sommerset Kencana.
DEMAND: SHORT-STAY DEMAND DURING EID HOLIDAYS BOOSTED OCCUPANCY LEVEL
High short stay demand from Eid al-Fitr and Eid al-Adha holidays which both fell in Q2 2024 have boosted the occupancy level during the review quarter. The Serviced Apartment sub-sector enjoyed a rise of occupancy at +3.2 QoQ and +0.4 YoY to 65.8%.
