Jakarta Central Business District Apartment Prices Rise 6 Percent

The sluggish domestic economy also impacted the property business throughout 2016. Apartment prices in Jakarta's Central Business District (CBD) in the third quarter of 2016 only increased by 5.7 percent to Rp 48.95 million per square meter compared to the same quarter of the previous year. Compared to the previous quarter, the increase was only 1.5 percent. In fact, the average apartment price in Jakarta in September 2016 only grew by 4.6 percent from the same period the previous year.

A survey of primary residential property prices conducted by Bank Indonesia shows that the residential property price index in the third quarter of 2016 only grew by 2.75 percent (YoY), compared to 3.39 percent in the previous quarter. Disbursement of home ownership loans and apartment ownership loans also slowed down, growing only 0.48 percent in the third quarter of 2016, lower than the previous quarter's 3.56 percent (qtq).

The slowing domestic economy, impacting decreased consumer purchasing power, made the property sector less vibrant in 2016. Some developers postponed the launch of their property projects. The less-than-conducive political climate leading up to the simultaneous regional head elections in 2017 also influenced people's decisions to purchase property. Some people allocated their funds to more urgent needs or saved them.