Developers in Indonesia are moving away from luxury residence and the high-end market as the economy continues to slow. Instead, they are focusing on the growing middle- and lower-segment housing market where demand has grown steadily this year, Asia News Network reported.
HM Hidayat, secretary-general of the Association of Housing Development (AHD) in Indonesia, said demand for lower- to mid-market housing has almost doubled while demand for high-end housing in the country has declined steeply. “Many developers who used to target the upper segment are now going after the mid- to low segment. That’s the trend.”
There were 250,000 houses built last year for the upper as well as the middle and lower housing segments, according to Hidayat. As of July, 400,000 houses had been erected for the middle and lower segments only, many as part of the government’s program to build a million homes, ANN added.
Developers in the AHD had planned to build 65,000 houses this year, but with higher demand, the association has increased the target to 150,000 houses. It’s hoped that this trend will offset slowing sales of high-end houses which are struggling even with the government’s relaxation of the rules on foreign ownership.
The growing demand for middle- to lower- segment houses was due in part to a backlog of housing needs in the country with about 13.5 million units currently in demand, according to the Public Works and Public Housing Ministry. Another reason for the increase is government incentives for the development of housing for the poor under the one-million-house program that were introduced in April.
Data from Indonesian Property Watch shows total property sales in Greater Jakarta came in at INR2.5 trillion in the first quarter of 2015. The high-end housing segment saw a massive decrease from 45 percent to 15 percent of this total, however. The country also witnessed a 50 percent sales decline year-on-year.
