REI Predicts Property Sector to Recover by 2025

BALI – The Central Executive Board of the Indonesian Real Estate Company Association (REI) revealed that the national property sector has not recovered 100 percent after the Covid-19 pandemic.

Chairman of the DPP REI, Joko Suranto, said that the recovery of the property sector is currently only around 70 percent. He said that the recovery of the property sector was not as high as other industrial sectors.

“Our property, to be honest, the pressure from the end of 2019 before Covid-19 until now has not rebounded like other industries. Maybe only 70 percent, conditions vary in the regions. There are also [regions] that have reached 90 percent,” Joko said when visiting Wisma Bisnis Indonesia, which was reported by bisnis.com, Wednesday (6/9/2023).

Joko said the national property sector is expected to fully recover after the political year is over or precisely in 2025.

“Maybe [recover] in 2025, after the political year,” he said.

In addition, Joko added, the absorption of property distribution has not been evenly distributed in each region. In fact, there are a number of regions whose average absorption is below 50 percent.

Meanwhile, REI sees three main obstacles that are still hampering the growth rate of Indonesia’s property performance. Among them are the trend of economic slowdown, decreased purchasing power to relatively limited access.

To overcome this, the provision of incentives to a number of groups is considered to be a catalyst that can boost domestic property absorption.

“When there are those with non-MBR (low-income people) income, there must be incentives. So that the urge and passion [to buy property] begins to emerge,” he said.

Citing data from the DKI Jakarta Regional Executive Board (DPD) of Real Estate Indonesia (REI), property products that provide optimal performance throughout 2023 are driven by sales of upper middle-class houses.

Chairman of DPD REI DKI Jakarta, Arvin F. Iskandar revealed, the results of research on the Development of the Indonesian Real Estate Industry recorded a trend of shifting property markets along with the end of the Covid-19 pandemic.

“REI DKI Jakarta members stated that property products that provide the best performance in 2023 are residential types in the form of housing and apartments,” he explained.

Arvin further detailed, 60.1 percent of REI members stated that upper-middle housing would make the most positive contribution this year.

Then followed by 28.1 percent of members stated that lower housing / RST (Integrated Prosperous Homes) and 5.7 percent of strata apartments.

This is different from the results of previous research in 2020, where 65.5 percent of REI DKI Jakarta members stated that lower housing / RST / FLPP (Housing Financing Liquidity Facility) was the product that provided the best performance.

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