English
Indonesia: Low-cost property dominates market demand in year’s first half
Consumer interest in low-cost housing dominated the property market demand in the first half of the year, while sales started to pick up amid the impact of the pandemic on the sector, online property marketplace 99 Group data show.
According to Singapore-based property marketplace start-up 99 Group, which owns 99.co and rumah123.com, low-cost residential property, priced below Rp 300 million (US$20,528), was the most searched for housing type on the websites in the first six months of 2020.
“Overall demand from January to June is still dominated by properties with a price range below Rp 300 million, which accounts for around 30 percent of all searches,” 99 Group Indonesia country manager Maria Herawati Manik told journalists in an online press briefing on Thursday.
The high demand for low-cost property is consistent throughout the first and second quarter, amid the slowing economy due to the pandemic. 99 Group data show that in the first quarter of the year, searches for low-cost property made up the largest chunk of overall searches at 33.9 percent, whereas searches for mid-range residential property with a price range between Rp 500 million and Rp 1 billion made up 17 percent.
In the second quarter, demand for cheaper property continued to reign despite a slight decrease at 26.5 percent of searches, tailed by mid-range property with 18.4 percent.
The economic downturn, job losses and lower purchasing power due to the ongoing health crisis have affected the property sector this year.
The combined sales of small, medium and large houses fell 43.19 percent year-on-year (yoy) in the first three months of the year due to the unfolding pandemic, according to BI’s quarterly Residential Property Prices Index (IHPR) survey.
Consequently, as fewer people made home purchases, the growth in residential property prices was slightly slower at 1.68 percent yoy in the January-March period compared to 1.77 percent yoy in the last three months of 2019, the BI survey revealed.
Upper-mid range properties, with a price range between Rp 1 billion and Rp 2 billion, only made up 14.2 percent of searches between January and March, 99 Group’s survey showed.
The company also claims in a statement that it recorded an average of 12 million website visits and saw 250,000 searches per month during the first quarter of this year. The number of searches for housing on the platforms increased 65 percent month-to-month (mtm) in May and an additional 50 percent mtm in June, after dropping 30 percent mtm in April.
“During the ‘new normal’ period, supply and search trends show a constant increase from May to June. The condition shows signs of recovery,” Maria said.
Furthermore, the company also recorded a 26 percent yoy sales increase in June, following a sales slump in April and May.
In the company’s survey, 47 percent of respondents were ready and willing to purchase a housing property, while 22 percent of those surveyed urgently needed to purchase a house.
Earlier this year, marketing consulting firm MarkPlus survey showed that consumers had not abandoned their plans to purchase residential property, but were rather delaying their purchase until next year.
MarkPlus, which surveyed 100 respondents living mostly in Greater Jakarta, found that consumers were currently saving their money to maintain personal financial stability amid the COVID-19 pandemic.
“The future demand may not be as strong, but we expect demand to bounce back next year as customers already have plans to buy [a house],” the firm’s senior associate, Irfan Setiawan, said in a virtual discussion on May 29.
Source: https://www.thejakartapost.com/news/2020/07/18/low-cost-property-dominates-market-demand-in-years-first-half.html