Indonesia’s Apartment Price Index Drops, A Positive Prospects for Landed House Market

Dengan keberadaan Pandemi Covid-19 yang tak kunjung hilang, apakah ini saat yang tepat untuk melakukan investasi di sektor properti?

investasi properti rumah tapak, invest property, landed house investment, property forecast
Minute Read

3 mins

Published

13.12.2021

Prior to the COVID-19 pandemic, the apartment price index in Indonesia was significantly more promising than landed houses. Built-in strategic areas complete with modern facilities and amenities, it is reasonable for professionals to get an apartment to support their high mobility. Then, how do the two-year-long pandemic shift the property trend in Indonesia?

apartment investment index drop in indonesia

Indonesia’s Apartment Price Index Drops, A Positive Prospects for Landed House Market

According to the Indonesia Property Market Index, there was a decline in the first three months of 2021, both quarterly and annually. With the drop in the price index, the property situation then turned to apartment housing which had become a hot commodity. The change in property prices in the quarter was contributed by the decline in apartment prices which stood at 109.9 in the first quarter of 2021, down 2.3% compared to the previous quarter (quarter-on-quarter) and down 5.3% compared to the first quarter of 2020. On the other hand, the landed house price index stood at 119 and increased by 2.36% compared to the previous quarter QoQ (quarter-on-quarter) and increased by 3.61% YoY (year-on-year).


Country Manager of Rumah.com – Marine Novita, said that one of the causes of the decline in apartment prices on the Indonesian property market was the lack of information in the community which also hampered interest in owning flats. According to her, most of the Indonesian owners act as the first generation of apartment inhabitants and have not yet reached the phase of certificate expiration and have not been able to observe the true examples of HGB (Hak Guna Bangunan) expires. As a result, many property-seekers are worried that if they bought an apartment their ownership of it could be lost at any time. This is what Marine Novita emphasized: it is the responsibility of all property stakeholders, including the government, developers, and buying and selling brokers, to promote more public awareness. In addition to the assumption of usufructuary rights, the Indonesian people’s habits, who are still not acclimated to living in residential complexes without a private yard, also paid an impact on the fall in apartment purchasing power.

indonesia property real estate outlook 2022

A Great Time to Buy Property

According to data from Rumah.com Indonesia Property Market Index (RIPMI) Q3 2021 shows an increase in property prices during the second quarter of 2021. It was recorded that the Residential Property Price Index (IHPR) in the second quarter of 2021 and the third quarter of 2021 was 1.12% (year-on-year), 1.49%, higher than the previous two quarters. Looking at these figures, we should be optimistic about positive growth in the property sector post-pandemic later. This phenomenon along with corrected house prices, the government stimulus in the form of a VAT incentive program for the property sector that has been extended until December 2021, as well as developer and bank promotions, is indeed a great time to buy property. Where the supply is abundant and the price trend is decreasing the dropping price index and increased supply should be utilised to make an instant property purchase. 

One area that we might be able to make a destination for buying property is South Tangerang. With the supply side not being disrupted much by the COVID-19 pandemic, the landed house supply index in South Tangerang rose sharply in Q2 2020 by 28.2 percent, with a steady annual spike at 90.6 percent in Q1 2021. Compared to the apartment outlook , the landed house market in South Tangerang is considered stagnant and will be more positive in the future as long as there is no oversupply. The preference of areas away from the city center is also in line with the property experts who predicted the trend of property consumers post-pandemic. Even so, one important factor of the selected area will be the existence of public facilities such as shopping centers, schools, stations, bus stops to qualify for access in the near future.

 

So, are you ready to hunt for landed houses as a long-term investment?