APPD Market Report Article

Jakarta

November 29, 2022

Yunus Karim, Head of Research, Jakarta

-0.3%

IDR 3,060,850

Rents
Falling

Low sales volume continues for upper- to luxury-grade projects

  • Condominium sales volume remained limited, especially for upper- to luxury-grade projects. In the current economic situation, buyers are not motivated to purchase investment assets, preferring to wait until the situation improves.
  • Demand for serviced apartments is high, supported by the reopening of the border. The COVID-19 situation has been improving, as seen from the drop in local cases, and more people, including expatriates, are returning to the office. However, vacant space will likely remain in the double-digits as more completions are expected next quarter.

Developers remain cautious about launching new projects

  • In 3Q22, Jakarta’s condominium market experienced no changes in terms of supply; there were no new projects introduced into the market or completed. However, if construction goes according to plan, a few new projects are expected next quarter, such as St Regis Residences, 57 Promenade and The Stature.
  • Similarly, there were no new serviced apartment projects in the quarter. Supply for the rest of 2022 will come from Oakwood Serviced Apartment @ District 8, expected to open by the end of October 2022, and Ascott Menteng as part of The Stature.

Overall prices and rents in Jakarta remain stable

  • Condominium prices continue to experience a slowdown in growth, affected by the low volume of sales. However, developers still need to achieve their annual sales targets, hence besides giving incentives, they will also likely choose to maintain prices.
  • Despite the increased interest for serviced apartments compared to last year, rents have remained unchanged. Limited demand and potential new supply have contributed to rent stability, which should attract more tenants.

Outlook: Developers expected to cautiously enter the market

  • The condominium market will likely continue to experience limited new supply due to market uncertainty. Demand is expected to recover when market sentiment improves and the situation stabilises.
  • With business activity returning to normal, enquiries for viewing is expected to increase gradually. Although this may not necessarily translate into transactions, it serves as an indicator of healthy demand in the market.

Note: Jakarta Residential refers to Jakarta's luxury condominium and serviced apartment markets.

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