After crisis through the late 90s and early 00s, Indonesia looking strong
San Francisco, CA -- (SBWIRE) -- 03/08/2013 -- Price Waterhouse Coopers and the Urban Land Institute stated that Jakarta, Indonesia is the top property market in the Asia Pacific region. The announcement came in November of 2012, and the market is proving them right.
The change happened suddenly, thanks in no small part to the difficulties that have been felt across the globe in other major markets. The fundamentals of supply and demand also play an important role as well. The office market in Jakarta is seeing an almost dumbfounding level of boom, with 94% occupancy, which spurs more interest in further office space. A grade space is now 98% filled to capacity.
The boom is an almost unheard of trend of building simply not being built fast enough to deal with the demand, causing shortages on space. That fact results in a 36% rental growth year-on-year.
The industrial land that is considered prime is also seeing a jump of 65% year-on-year prices, as the need for manufacturing and distribution space has reached a fever pitch. The expansion of such space cannot keep up with how fast companies are gobbling up land, and thus the rise in price continues.
Jakarta experienced its highest clearance rates in 2012, with 12,700 units. The middle and lower markets, as well as upper-class apartment market were all seen to be performing very well. Prices moved up as the need for residential housing property continued to encourage more and more development.
What caused this boom? To understand it, one must look to the financial crisis of 1997 and 1998, which continued to burden local and international businesses within the provinces. It took almost a full decade for trust to return to the region, but with a government overhaul, the economic potential of the country got back on track. With an almost wholly transparent economic system, the country saw continued benefit from international investors, who now are less inclined to play the wait-and-see game.
Local buyers are also an important ingredient to the country's success, as they continue to drive the economy forward. Further growth is predicted thanks to both factors.
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