APPD Market Report Article
JakartaFebruary 28, 2022
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.