APPD Market Report Article

Jakarta

February 28, 2022

-2.0%

IDR 3,060,850

Rents
Falling

Condominium demand continues to be limited during holiday season

  • The prime condominium market in 4Q21 was still experiencing a slowdown in demand due to the holiday season despite relatively few COVID-19 transmissions compared to the last quarter. Developers are still focusing on selling unsold stock with attractive marketing strategies.
  • Limited expatriates due to travel bans have reduced demand in the serviced apartment market, leading to a vacancy rate of around 30%. Locals are still the majority of tenants in 4Q21 as weekend and holiday season staycation visitors.

One new condominium project completed in Central Jakarta

  • Looking at the current state of the property market where demand is limited, no new condominium projects launched into the market. Meanwhile, one new condominium project was completed: The Pakubuwono Menteng located in Central Jakarta.
  • No new serviced apartment projects were completed this quarter. The scheduled completion of Oakwood Serviced Apartment in District 8 is pushed back to early 2022.

Limited demand in the market results in prices remaining flat

  • With limited demand in the market, condominium prices remained flat to support sales activity. Developers continue to extend various marketing strategies, such as offering semi-furnished units, vouchers and free service charges to attract buyers.
  • Rent prices continue trending downwards in 4Q21 by 0.3% q-o-q. The limited demand from corporate and embassy expatriates has led to price compression. On the other hand, landlords focused more on catering to short-term demand from local tenants during the Christmas and New Year’s holidays.

Outlook: End-user demand to be more resilient

  • Market confidence is likely to pick up when COVID-19 cases remain under control and the easing of public restrictions allow more offline marketing activity. The interest rate is likely to remain low, boosting demand in the market.
  • Prime serviced apartment rents are expected to stabilise next year when fewer restrictions are applied on travel, allowing for more expatriate arrivals and, by extension, increasing the demand.

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

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