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Asia Property Report

Daily, Bangkok
Up-to-date news and coverage of industry trends and innovations from Asia with an in-depth special focus on real estate hot spots, as well as key interviews with important industry figures.
 

Office space prices rise in Jakarta

Apr 18, 2012
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Property consulting firm Cushman & Wakefield claim average gross rentals for office space increased in Jakarta by 9.5 per cent from the previous quarter.


The limited supply of office space in the CBD has been attributed to the price rise.


The rising prices will not cause a property bubble claims Cushman & Wakefield’s research and advisory head, Arief Rahardjo.


“The market demand is still able to absorb the supply of property, thus I don’t see any bubble in the near future” he said.


Over 70 per cent of residential estate buyers are end-user buyers, which reduces the chance of overpricing caused by an excess of demand from investors according to The Jakarta Post.


The property consulting firm raised concerns over the possibility of a property bubble in the condominium market.


In 2012, 20,302 new condominiums units are set to enter the market, with a further 20,447 units expected in 2013, compared to the average of 8,468 units per year in the last five years.


Occupancy is expected to fall below 60 per cent over the next two years.


Yield rates of condominiums have been decreasing since 2008, currently hovering above six percent, which raises concerns over whether it will dip below the current deposit rates of five per cent in commercial banks.