by Marilyn Ardipradja for Colliers International
Indonesia continues to maintain the interest of international investors because of its large population and therefore potentially significant consumer market. Several very important infrastructure projects are in the planning stage or have recently started. Combined with rapid growth in multiple sectors, which created the need for additional expatriate staff and management staff which ultimately affects the housing market.
Some reports indicate a decrease in the number of expatriates entrants to middle management and lower due to the fact that work permits for these levels are limited. Multinational companies, however, continue to operate, develop or build their businesses in Indonesia and therefore require expatriates in many senior management positions.
It is therefore not surprising that stimulated the economy has resulted in higher prices, which is particularly noticeable in the market for residential rental property Jakarta. An influx of foreigners seeking decent homes was a factor in causing rents to climb higher over the past year. Although there is still no shortage of housing, the main properties that meet all or more of the safety requirements of multinational enterprises, as in a gated community or close to an international school, are certainly more more in the price and are increasingly difficult to find. South Jakarta is still the most popular choice for expatriate families due shortest travel time for most international schools.
Due to the increase in demand for homes that meet these standards, the owners previously asking rent a year in advance are now able to apply for a minimum of two to three years in advance. The owners are rarely willing to negotiate a one-year lease on a house. general rental prices increased significantly with at least a 20% increase, and in some cases 30% or more. These drastic increases come as a shock to many tenants who are forced to rent the small, older properties or those not in a prime location. Although multinational companies generally provide for rent increases year by year, few are prepared or willing to accommodate this scale rent increases and are unwilling to see them living allowances for their employees. Like almost all rents are in US dollars, a huge additional pressure has been placed on housing budgets due to the rise in the US dollar against the Rupiah.
As land prices increase in Jakarta, landlords require a higher return on their investment. They currently enjoy strong market demand and are therefore able to dictate the price for their properties. Housing in prime locations will rarely empty more than a month before a new tenant moves.
The rental rates for apartments are more stable, especially if they are part of an international chain because they rely on the companies usually price dictated by the seat of oversea. Generally, rental apartments will be subject to a 10% - 12% annual increase. Because of this expected increase, apartment leases are normally for one year, so the increase can be incorporated. However, service fees may vary considerably from a building depending on the extent of the surrounding terrain and what types of facilities are provided. Rental apartments are usually subject to 10% VAT and 11% service charge. A number of residential buildings have given notice that from 1 January 2014, their service charge will increase to 13.5%. This will swell even higher rental rates in the coming year.
Despite the fact that there will be several new residential buildings being completed in 2014, the apartment owners and management remain very optimistic that they will be able to maintain their prices and maintain their rates very high occupancy. The independent housing supply however is not keeping up with demand, so it is very unlikely that rents will be down in the foreseeable future. As Indonesia continues to experience rapid growth and requires the assistance of expatriates still, Jakarta owners will be in a strong position to dictate the rental price.
With the continuous increase in rental prices, find your home in Jakarta has become increasingly difficult. If you can your company to choose your own house in Jakarta, you may first want to become familiar with the different residential areas. It is important in all cases to consider the traffic problem in Jakarta, and the time you spend commuting between work, school, activities, friends and home.
These are some of the most popular areas:
Kemang (South Jakarta)
Kemang is one of the most desirable residential areas of Jakarta with a nice variety of well stocked stores with Western and Asian food. New restaurants, shops and furniture stores are increasing every day and growing. Kemang is also close to several clubs and organizations, cultural centers and sports facilities.
Pondok Indah (South Jakarta)
This area is a little more recent, with streets, houses and shops that would appeal to those who prefer a style of house more Western. Homes here range from the modest to the particularly large. Pondok Indah is blessed with, streets and elegant tree-lined sidewalks.
Cipete / Cilandak (South Jakarta)
The area between Pondok Indah and Kemang, has the same advantages as the old in terms of location, but is significantly local in flavor. There are many beautiful homes, some of which have relatively large gardens. The streets are relatively quiet and retain their Indonesian character.
Menteng (Jakarta Central)
Menteng is a very special area for Jakartans apart from other regions in its history. Menteng can be described as old, elegant and aristocratic. You will find many Dutch stately homes of origin, and what remains of any architecture or colonial character. This area is known for its embassies and ambassadors' residences and is home to many Indonesian government officials.
Kebayoran Baru (South Jakarta)
The same as Menteng, this area consists of several beautiful houses and landscaped areas. It is also popular with many government officials. Kebayoran Baru encompasses bustling shopping areas Blok M and Panglima POLIM.
Kuningan (Central Jakarta)
Kuningan can be described as a residential area in the business district. There are new attractive apartment complex here, and the development of the former housing Oil Pertamina Village, with its streets and sidewalks American style. Kuningan has a metropolitan atmosphere and is close to shopping centers, restaurants, hotels, office buildings and medical facilities.
Permata Hijau / Simpruk (South Jakarta)
This area, very close to the large Senayan Sports Stadium and shopping malls Plaza Senayan and Senayan very elegant and chic city has a variety of houses and apartments. You will find wide quiet streets and particularly good access to sports facilities.
Bintaro (South Jakarta)
Bintaro is an area to the south-western outskirts of Jakarta, including the most recent developments, the housing for the middle class and private homes . Because it is a new residential area, there are few facilities apart from a shopping center and basic supermarkets.