Rumah.com Property Market Index data showed a slight increase of 1% in the price index on a quarter-on-quarter (QoQ) basis in the fourth quarter of 2022. Stagnancy was also seen in the supply index, which only increased by 0.3% (QoQ) . Even so, a number of areas in Greater Jakarta continued to show positive trends in the fourth quarter, such as the Tangerang and Bogor Regencies.From the demand side, the national market demand index for property also declined by 40.4% (QoQ) on a quarterly basis. However, the trend of property searches for residences above IDR 1 billion continues to increase.The trend seen in the national price, supply and demand indices is estimated as a seasonal trend, in addition to the trend of rising interest rates and the issue of recession.
List of contents
- Home Viewpoint.com
- Indonesia Property Sales Market Index
- Macroeconomics
- Territory Analysis
- Conclusion
- Download Report
Home Viewpoint.com
Indonesia Property Sales Market Index
The national property price index in the fourth quarter of 2022 is at 120.4. This figure only increased by 1% on a quarterly basis in the fourth quarter of 2022. On an annual basis (year-on-year/YoY), the trend still shows a moderate increase of 5.8%.From the supply side, the national supply index was almost stagnant, with an increase of only 0.3% on a quarterly basis. On an annual basis, the increase in the supply index looks quite moderate, namely 6.8%.The slight increase in the property price index and property supply index, which was accompanied by a decrease in the market demand index, is expected to be a seasonal impact. Consumers seem to be more focused on consumer spending for Christmas and year-end holidays.Meanwhile, the downward trend in mortgage rates, which has begun to slow down in line with the rising trend in the benchmark interest rate (BI 7 Days Reverse Repo Rate), is expected to have an increasingly visible impact in early 2023.
From the consumer side, the demand for housing in the fourth quarter of 2022 will still be dominated by the demand for landed houses, which is 92% of the total housing searches. Meanwhile, the national demand index fell by 40.4% (QoQ).The decline in the demand index in the fourth quarter occurred in both the landed and apartment sectors. The demand index for landed houses decreased by 41%, while the demand for apartments decreased by 34%.
Property trends seem to be starting to return to their annual cycle. Before the pandemic, the second and fourth quarters were always ‘quiet’ quarters in the property sector because during this period consumers were more focused on spending for consumption.If in the second quarter consumers are more focused on shopping for Eid al-Fitr and homecoming activities, consumers in the fourth quarter will be more focused on shopping and year-end holidays. Developers responded to this trend by delaying the launch of new units and holding back price increases.
Macroeconomics: The Rupiah Exchange Rate Strengthens, Inflation Decreasing is a Good Sign in 2023
Rupiah Exchange Rate Strengthens
The rupiah appreciated in early 2023. In mid-January, the Indonesian currency strengthened 3.18% both point-to-point and on average, compared to December 2022. The strengthening of the Indonesian currency was even better than the currencies of other developing countries such as the Philippines (2.08% year-to-date/YTD), Malaysia (2.04% YTD), and India (1.83% YTD).The strengthening of the Rupiah was driven by positive investor perceptions of the prospects for the domestic economy and maintained stability, apart from a number of other aspects.
Inflation Declines Faster Than Expected
The price adjustment for subsidized fuel oil (BBM) in September 2022 has had a positive impact on inflation. Consumer Price Index inflation at the end of 2022 was recorded at 5.51% (YoY), lower than the Consensus Forecast’s forecast of 6.5% (YoY). Core inflation was also low at the end of 2022 at 3.36% (YoY), lower than Bank Indonesia’s forecast of 4.61% (YoY).
Mortgage interest rates persist
The BI 7DRR interest rate is 5.25% as of November 2022 or an increase of 175bps since the previous four months. On the other hand, mortgage rates were maintained at 7.7% in November 2022. This figure decreased by 20bps compared to the previous four months.However, the downward trend in interest rates for housing loans (KPR) and apartment ownership loans (KPA) seems to be slowing down in line with the increase in the benchmark interest rate from Bank Indonesia.
Territory Analysis
4 New and Stretching Toll Roads in the Central-North Area of Tangerang Regency
Amid the stagnation of the property price index in the fourth quarter of 2022, Tangerang Regency showed the largest increase in property prices, namely 7.7% on a quarterly basis and 29% on an annual basis.
Property searches in Tangerang Regency were dominated by searches under IDR 750 million, which accounted for 61% of the total searches. Meanwhile, the total number of residential property requests in the region fell by almost 36% quarterly. This is in line with the national demand trend which fell by more than 40% (QoQ).The area around the industrial area shows a positive trend throughout the fourth quarter of 2022, including Tigaraksa, Sepatan and Pasarkemis.
Tigaraksa Increasingly Attracts Commercial Developers
Tigaraksa is still known as a subsidized residential area or lower middle class to this day. However, since the last two years, a number of commercial residences that offer more complete and better facilities have begun to appear.Therefore, even though property searches in Tigaraksa are currently still dominated by searches for prices below IDR 300 million, property seekers must be prepared to slightly increase their prepared budget. A number of developers now do not hesitate to set prices of up to Rp. 600 million.The developer’s optimism cannot be separated from the plan to build the Serpong-Balaraja toll road, which will connect the South Jakarta area to Tangerang Regency. This toll road plan is a solution for the mobility of the people of Tangerang Regency to Jakarta, who currently still rely on the Merak-Jakarta toll road which is dominated by heavy transport vehicles or cross-provincial roads whose width is not representative of the number of vehicles that pass.In addition to the toll road, the Government also plans to build an Electric Rail Train (KRL) station on the commuter line extension. This plan is also a solution to the existing Tigaraksa station, which is remote and can only be accessed via a small road.From the investment side, Tigaraksa can be a promising instrument. Data from Rumah.com Property Market Index shows price increases of up to 21% per quarter in the fourth quarter of 2022. So, if currently cluster-type housing with internal facilities such as gyms, playgrounds, and swimming pools can still be obtained at a price of IDR 400 million for a building area of 72m2, consumers may have to spend up to IDR 500 million to IDR 600 million in the next two to three years
Pasarkemis integrated residential area center
Pasarkemis developed into the center of a residential area in the northern part of Tangerang Regency. Not only small-scale residential developers, big-name developers are also involved in this area with their respective integrated areas.Alam Sutera Realty, for example, is developing Suvarna Sutera with a land area of 2600 hectares. Another big-name developer, Jaya Real Property, is also developing an integrated area titled Puri Jaya, with an area of 900 hectares. There is also SwanCity through Lavon City, with a land area of 2600 hectares.The Pasarkemis area is one of the most strategic areas in the northern part of Tangerang Regency. Apart from having good access to the Jakarta-Merak toll road, this area is also close to Soekarno-Hatta Airport. The Tangerang Regency Government has revealed plans to build a toll road for the airport train to Pasarkemis to facilitate access to the busiest airport in Indonesia.Apart from that, the Government also revealed its long-term plan regarding the construction of the Semanan-Balaraja toll road, which will connect the Soekarno-Hatta Airport area to Rajeg and Balaraja. According to the initial plan, this toll road will cross the Pasarkemis area. This will increase the mobility options for residents in the Pasarkemis area.Pasarkemis seems to be developing into an upper middle class residential area to support industrial estates in the Cikupa, Balaraja and surrounding areas, with the target market being middle and upper class workers who are executives and expatriates. The integrated areas in Pasarkemis itself will continue to grow and become more complete. Therefore, this area has good price development prospects.
Sepatan is affected by the development of Pantura
Sepatan and East Sepatan are located between the Pasarkemis integrated residential area and the coastal areas of Kosambi, Teluknaga and Pakuhaji. The Pantura area itself is rising in popularity along with the construction of Pantai Indah Kapuk 2.Currently, the median price for residential properties in the Sepatan and East Sepatan areas is in the range of IDR 9 million with an increase of around 8% per quarter in the fourth quarter of 2022. The increase in property prices in these areas is expected to continue. Not only because of the growing development of the PIK 2 area, but also with the plan to build a toll road.The Tangerang Regency Government revealed the plan to build the Pakuhaji-Sepatan Timur-Neglasari-Airport toll road. The construction of this toll road will facilitate mobility from the north coast area to the airport, which will eventually be connected to the Jakarta Outer Ring Road.
Conclusion
The national property market was stagnant in the fourth quarter of 2022. The demand index for property declined quarterly. However, this is suspected as a seasonal impact of the year-end holidays. During this period, as well as during the Eid al-Fitr period, the public and property consumers focused their spending on year-end shopping and holiday needs.Developers reacted to this seasonal trend by restraining increases in property prices and supply, making the property price and supply index move only marginally on a quarterly basis. Even so, developer optimism is still visible through annual movements. Both price and supply indices show an increase of 6-7% per year.The impact of the increase in Bank Indonesia’s benchmark interest rate on mortgage rates was still not very visible until November. A more significant impact is expected to be seen at the end of the first quarter of 2023.In the Tangerang area, the planned construction of four toll roads is predicted to have an impact on increasing property prices in the central and northern areas of Tangerang Regency. The four toll roads, namely Serpong-Balaraja, Semanan-Balaraja, Balaraja-Rajeg-Teluknaga, and Pakuhaji-Airport will facilitate mobility in the northern area of Tangerang Regency and increase consumer interest. Areas that are expected to be positively affected in terms of prices include Tigaraksa, Pasarkemis and Sepatan.
Source: rumah
