In their latest reports, JLL and Colliers have looked at Jakarta’s residential investment landscape, and found luxury buyers did not return to the market in 2Q17, but some CBD developers offer attractive pricing and payment terms, and some decentralised projects offer affordable pricing to achieve healthy sales. Other factors including expats’ working permit issues and the shifting trend from cash instalment to mortgages have impacted the market.

Key findings from JLL’s  2Q17 Residential Report for Jakarta include:

• Average price per sqm per annum of net lettable area of residential property in Jakarta IDR 3,443,989
• Luxury buyers yet to return to the sales market
• CBD projects remain strong if attractive pricing and payment terms are offered
• No higher-end physical completions in 2Q17 meant supply is reduced
• This is in part due to luxury and super luxury taxes.
• Strongest demand is expected for smaller units at affordable prices
• Serviced apartment rents and condo prices flat
• Indonesia is still attractive to Hong Kong, Singapore and Japan developers
• But mainland Chinese groups continue to explore expansion opportunities.

Click here to veiw the JLL Jakarta Residential Report 

Factors affecting apartment investing in 2Q17, according to Colliers include:

• Financial instruments offer more competitive return compared to the property sector
• The new school year
• The traditionally slow month of Ramadan (May-June)
• Lacklustre hiring of expatriates 
• Evolving leasing landscape from senior level Western expats to younger, single Asian expats
• Any new property regulations from the newly elected governor

Problems for expats

Ferry Salanto, Senior Associate Director of Research for Colliers International said a ‘common complaint amongst expatriates trying to get work permit approval is about securing online process requirements. The Manpower Department has a mission to provide more job opportunities for as many Indonesians as possible. The employer will be scrutinised whether or not this position could be led up by a local instead. For a manager or upper management, the length of the visa will not exceed 12 months. Many landlords still insist on a minimum one-year lease term, whilst occupants ask for a shorter tenure in anticipation of a possible early termination due to some factors, such as related to the company’s financial capacity in the future or that a project is awaiting approval before being executed.

Click here to view the Colliers Expatriate Housing Report 

Salanto continues “despite experiencing a sluggish demand serviced apartment projects managed by global chain operators such as Shangri-La, Ascott, Frasers or Oakwood, maintain rental tariff in compliance with their global / headquarter of offices, which is why they do not have the flexibility in setting their local price to be similar with other stand-alone housing or other local serviced and non-serviced apartments. However, these international operators may be more accommodative in providing non-cash offerings such as laundry, breakfast or use of facilities without extra charges.

Prices in US$ per month, using a non-serviced 3-bedroom apartment as a benchmark:

Source: Colliers International Indonesia - Research and Residential Tenant Representation

Average Asking Price (in IDR) in Three Different Areas:

Source: Colliers International Indonesia - Research

Sources:

Colliers Quarterly Q2 2017 Jakarta Apartment Report

JLL’s  2Q17 Residential Report for Jakarta

Colliers Quarterly Q2 2017 Jakarta Expatriate Housing Report