A man walks past a cemetery with Jakarta’s flagship housing project in the background. Called Klapa Village, it is the first project launched under the zero rupiah downpayment housing scheme. DHONI SETIAWAN/THE JAKARTA POST
Property consulting company Savills Indonesia has urged property developers in the country to think “outside the box” in response to the rapidly growing sharing economy, which is expected to influence rent and housing prices in major cities in the foreseeable future.
Savills Indonesia managing director Craig Williams said developers would need to be more meticulous in reading market demand, extra creative in constructing product plans and maximise digital platforms in marketing its products.
“Several ideas should be considered in future property trends, including the types of high-value properties, segment focus on investors, the concept of beyond property and innovating to create real estate units with smart technology,” Williams said in Jakarta last week.
He said the growing trend of co-living and co-working spaces also provide opportunities for individual owners to offer their assets or units to the market by collaborating with existing start-ups.
Meanwhile, Savills Indonesia research and consultancy director Anton Sitorus said one of the reasons why the sharing economy concept was developed was due to a shift in consumer views on the concept of ownership, with more people today feeling that they do not actually need to own property if they can enjoy housing or office units through medium to long-term leases.
“As a result, many emerging businesses that provide co-working, co-living and co-warehousing facilities are in demand by many start-up e-commerce and technology companies,” Anton said last week.
Anton also mentioned that Indonesia had potential in digital economic growth.
‘Promoting sales’
A recent joint survey between Google, Temasek and Bain said the potential of Indonesia’s digital economy market, which includes e-commerce, online media, travel and transportation sectors, will increase from $8 billion in 2015 to $40 billion this year and is expected to grow to $130 billion by 2025.
In response to current conditions in the country’s property market, Anton said developers needed to consider correcting property prices, which have been generally too high owing to sharp inflation in the last couple of years.
“Developers could start promoting flash sales or fire sales for some of its real estate products to attract buyers and investors so that the market can bloom once more,” said Anton.
There are four categories of companies with the sharing economy concept in the property sector operating in the country, which are co-working spaces (WeWork, CoHive, Spacelabs), co-financing (iFunding, Kickstarter, Gradana), co-marketing (Homie, 99.co) and rental lodging (AirBnB, OYO, Travelio), Savills Indonesia retail services senior director Rosaline Lie said.
“Looking at the performance of a number of these companies in a relatively short time, it appears that the business prospects of the sharing economy in the property sector are growing,” she said.
Turning away from Jakarta
Meanwhile, Savills Indonesia’s recent research concluded that the supply of apartments in Bogor, Depok, Tangerang and Bekasi (Bodetabek) would grow at a higher rate compared to Jakarta in the next four years, with the supply of new apartments in Bodetabek estimated to increase by 129,000 units by 2022. In comparison, the supply of new apartments in Jakarta is predicted to only grow by 50,000 units in the next four years.
Furthermore, the number of new apartments in Jakarta in the third quarter reached 2,600 units, a sharp decline from 3,900 apartments in the same period, last year. “We think that due to the scarcity of land in Jakarta, more people will turn to Bodetabek to purchase apartments in the next couple of years,” said Anton.
In addition, Anton also claimed that the difference in prices between Jakarta apartments and Bodetabek apartments was another reason behind the vast growth of apartment supply on the outskirts of Jakarta.
Savills Indonesia data shows that the average price of apartments in Bodetabek is around 16 million rupiah ($1,140) per square metre, far lower than about 26.6 million rupiah per square metre in Jakarta.
“Generally, Bodetabek apartments are still affordable to a wider range of the population. On the other hand, apartments in Jakarta, especially in the middle of the city, are becoming too expensive,” said Anton.
The number of apartments sold in Jakarta were recorded at 1,300 units in this year’s third quarter, which was also a decrease from 1,800 units in the same period last year. Meanwhile, the number of apartments sold in Bodetabek reached 6,800 units in this year’s third quarter.
Despite the slowing growth in supply and units sold, Jakarta still has significantly more apartments compared to Bodetabek. According to Savills data, there are 166,200 units in Jakarta and 97,200 units in Bodetabek.
THE JAKARTA POST/ASIA NEWS NETWORK
