Key trends that will impact Property 2021
Connectivity will become a main selling point
President Joko Widodo’s focus on infrastructure is expected to positively impact the property sector in 2021. The government has allocated a budget of Rp413.8 trillion for this, up by 47.2% from 2020 (Rp281.1 trillion), after adjustments to account for the pandemic. One of the key focus areas here is connectivity improvement.
In Jabodetabek, transportation infrastructure development focuses on improving connectivity between DKI Jakarta and satellite areas (Bogor, Depok, Tangerang, Bekasi), supporting the industry's cross-region activities, as well as improving the convenience of the people commuting in these areas.
The latest upgrade is the Cinere-Serpong toll road (part of Jakarta Outer Ring Road 2, or JORR 2) that connects the Depok region by a seamless route to another satellite area, Tangerang Selatan. Cinere-Serpong will also be connected to the Serpong-Kunciran-Cengkareng toll road, making it easier to get to the airport from Depok. In the opposite direction, Cinere will link with Bekasi via the Cinere-Cimanggis-Cibitung-Cilincing-Tanjung Priok toll road.
This connectivity directly affects the property development in satellite areas. The RIPMI Price Index showed an increase in areas covered by toll roads, such as Depok. When Depok’s price index in the third quarter of 2020 dropped by 2.62% yearly, the sub-districts best served by toll roads instead showed an increase -- such as Cimanggis (9%), Limo (4%), and Cinere (3%). Meanwhile, Cinangka in Sawangan sub-district, Depok, increased by around 35%.
A number of sub-districts in Tangerang Selatan which are located near the Cinere-Serpong toll road also showed an increase, such as Pondok Cabe (6%), Serpong (12%), and Pamulang (19%).
Meanwhile, The Mass Rapid Transit (MRT) and Light Rail Transit (LRT) developments are still underway with the Jakarta, Bogor, Depok, Bekasi (Jabodebek) LRT approaching 80% completion.
This commuter line is still an attraction for property consumers in Jabodetabek. Even though the LRT isn’t yet fully operating, state-owned enterprise Adhi Commuter has continued to develop apartments the stops along the route. As of 2020, the company had ten LRT cities under development throughout Jabodetabek.
Adhi Commuter followed the success of Perumnas, also state-owned, by collaborating with PT Kereta Api Indonesia (KAI) in developing TOD concept housing along the KRL route, namely Prasada Mahata Margonda (Depok), Prasada Mahata Tanjung Barat (South Jakarta), and Prasada Mahata Rawa Buntu (South Tangerang).
Mortgage rates are expected to drop
Bank Indonesia reduced the Bank Indonesia 7 Days Reverse Repo Rate (BI7DRR) interest rate again to 3.75% on 19 November 2020. The decision was a follow-up step to push the recovery of the national economy. If the BI7DRR interest rate is maintained, or even reduced again in December, we can expect the economic situation to be more stable in 2021.
However, the drop in BI7DRR interest rates should be followed also by mortgage rates. When the BI7DRR interest rate dropped 20% in November 2020, compared to the beginning of 2020, the mortgage rates for both landed and vertical housing fell by only around 4%.
Property searches increase in satellite areas
Property search trends in Rumah.com continue to rise despite the pandemic, especially in the Jabodetabek area.
Property search trends in Rumah.com continue to rise despite the pandemic, especially in the Jabodetabek area.
Property searches in West Java in the third quarter of 2020 increased quarterly and yearly. Cities in West Java attracting the most searches were Bekasi and Bogor. Property searches also increased in Banten, quarterly and yearly. The city attracting the most interest in the Banten province was Tangerang City.
Better infrastructure is driving the interest, as gauged by online searches in Bogor, Bekasi, and Tangerang City, as access to areas with more affordable prices becomes easier.
DKI Jakarta also saw an increase, albeit not as large as West Java or Banten. Online property research in the capital region increased by 59% (QoQ) and 143% (YoY).
The most frequent type of search on Rumah.com was for homes with a price range of Rp300 to Rp750 million. Meanwhile, if combined, the amount of total property searches in the under Rp1.5 billion price range made up 61% of the total searches.
In other words, those looking for property via Rumah.com come from middle and middle-high income groups, consumers who are not concerned about distance from the city or business centers.
Demand expected to increase next year
The main effect of the COVID-19 pandemic according to the majority (60%) of respondents is the postponement of property transactions. Three out of five respondents to the Rumah.com Consumer Sentiment Survey said they would postpone property transactions. Not to worry, however, as the majority said they would resume the process in 2021. Meanwhile, around a quarter of respondents indicated they would avoid areas flagged as red zones (high COVID-19 case count).
The Large-Scale Social Restrictions (PSBB) worked to make people spend more time at home. This also impacted the outlook on new homes. The Rumah.com Consumer Sentiment Survey data showed that 34% of respondents are now more aware of the need to own a house.
Key internal factors affecting property purchases included ownership status. This factor was chosen by 63% of respondents, followed by price (48%), and the house’s facilities (41%).
Meanwhile, location (85%) and security (60%) are the external factors considered most important by respondents. Other external factors are public facilities around the housing area (48%) and public transportation (47%).
Meanwhile, location (85%) and security (60%) are external factors considered the most important by respondents. Other external factors are public facilities around the housing area (48%) and public transportation (47%).
Big Property Bets in 2021
Connectivity and price will still be the main focus of the property market in 2021. Distance to the city center is no longer the primary concern, as long as the route is relatively convenient and there is less traffic. That’s why areas around integrated residential areas (planned communities), new toll roads, and public transportation routes are still very attractive.
With that, Rumah.com analyzed a number of areas predicted to be targets for consumers in 2021.
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DKI Jakarta
The region with the brightest future in DKI Jakarta is East Jakarta, due to prices, which are the most affordable compared to other DKI areas. Today, the average price in DKI Jakarta is around Rp27 million per square meter. Meanwhile, the average price in East Jakarta is Rp16 million per square meter, or around 45% lower.
The emergence of new townships and planned communities shows that developers and suppliers confidence are seeking to attract consumers with more to spend. One of these areas is Jakarta Garden City (JGC) in Cakung. The RIPMI Price Index shows that the presence of these integrated residential areas have seen Cakung prices rise by 4% per year. Meanwhile, already established areas of JGC, such as Pulo Gebang, have seen 10% quarterly and 15% yearly growth.
Bekasi
During the first quarter, Bekasi drove the West Java property price inde. While other cities in West Java showed an increase no more than 2% (QoQ), the property price index for Bekasi saw an increase of up to five percent for landed houses. Jatiasih and East Bekasi were the areas with the highest increases.
For consumers, property prices in East Bekasi are still pretty affordable and there is the promise they will continue to climb in the future. This is supported by the government’s efforts to tidy up the situation for commuters, through a number of infrastructure projects, such as Bekasi-Cawang LRT, elevated roads, as well as the more long-term Balaraja-Cikarang MRT project.
Greater Tangerang
Tangerang and Cipondoh sub-district were the two most promising areas in the Tangerang City region in 2020. Based on Rumah.com’s analysis, these two areas have complete public facilities and various options for public and private transportation.
Despite not having many public facilities in Cipondoh, residents still benefit from malls, shopping centers, and middle-high hospitals in nearby West Jakarta.
Meanwhile, the Tangerang sub-district has become the center of Tangerang City, with the support of public facilities and mass transportation infrastructure. The area boasts five malls - including the famous TangCity Mall and Lippo Karawaci, as well as two KRL commuter line stations, and easy access to the airport and the Jakarta outer ring toll road. In addition, the Cinere-Serpong toll road which is scheduled to open at the end of 2020 or early 2021, will lift surrounding areas such as Pondok Cabe, Serpong, and Pamulang.
Meanwhile, the Tangerang sub-district has become the center of Tangerang City with the support of public facilities and mass transportation infrastructure. There are two KRL commuter line stations, easy access to the airport and the Jakarta outer ring toll road, and five malls, including the famous TangCity Mall and Lippo Karawaci.
In addition, the Cinere-Serpong toll road which is scheduled to operate at the end of 2020 or early 2021, will lift surrounding areas such as Pondok Cabe, Serpong, and Pamulang.
Depok
Property development in Depok in 2021 will center around Cimanggis, Cinere, and Sawangan. Again, new toll roads, namely the Cimanggis-Cibitung, Cimanggis-Cinere, and Cinere-Serpong will be the main factors. Cimanggis and Sawangan will become new alternatives for homebuyers in Depok, who have always focused on the Margonda area.
Connectivity will become a main selling point
President Joko Widodo’s focus on infrastructure is expected to positively impact the property sector in 2021. The government has allocated a budget of Rp413.8 trillion for this, up by 47.2% from 2020 (Rp281.1 trillion), after adjustments to account for the pandemic. One of the key focus areas here is connectivity improvement.
In Jabodetabek, transportation infrastructure development focuses on improving connectivity between DKI Jakarta and satellite areas (Bogor, Depok, Tangerang, Bekasi), supporting the industry's cross-region activities, as well as improving the convenience of the people commuting in these areas.
The latest upgrade is the Cinere-Serpong toll road (part of Jakarta Outer Ring Road 2, or JORR 2) that connects the Depok region by a seamless route to another satellite area, Tangerang Selatan. Cinere-Serpong will also be connected to the Serpong-Kunciran-Cengkareng toll road, making it easier to get to the airport from Depok. In the opposite direction, Cinere will link with Bekasi via the Cinere-Cimanggis-Cibitung-Cilincing-Tanjung Priok toll road.
This connectivity directly affects the property development in satellite areas. The RIPMI Price Index showed an increase in areas covered by toll roads, such as Depok. When Depok’s price index in the third quarter of 2020 dropped by 2.62% yearly, the sub-districts best served by toll roads instead showed an increase -- such as Cimanggis (9%), Limo (4%), and Cinere (3%). Meanwhile, Cinangka in Sawangan sub-district, Depok, increased by around 35%.
A number of sub-districts in Tangerang Selatan which are located near the Cinere-Serpong toll road also showed an increase, such as Pondok Cabe (6%), Serpong (12%), and Pamulang (19%).
Meanwhile, The Mass Rapid Transit (MRT) and Light Rail Transit (LRT) developments are still underway with the Jakarta, Bogor, Depok, Bekasi (Jabodebek) LRT approaching 80% completion.
This commuter line is still an attraction for property consumers in Jabodetabek. Even though the LRT isn’t yet fully operating, state-owned enterprise Adhi Commuter has continued to develop apartments the stops along the route. As of 2020, the company had ten LRT cities under development throughout Jabodetabek.
Adhi Commuter followed the success of Perumnas, also state-owned, by collaborating with PT Kereta Api Indonesia (KAI) in developing TOD concept housing along the KRL route, namely Prasada Mahata Margonda (Depok), Prasada Mahata Tanjung Barat (South Jakarta), and Prasada Mahata Rawa Buntu (South Tangerang).
Mortgage rates are expected to drop
Bank Indonesia reduced the Bank Indonesia 7 Days Reverse Repo Rate (BI7DRR) interest rate again to 3.75% on 19 November 2020. The decision was a follow-up step to push the recovery of the national economy. If the BI7DRR interest rate is maintained, or even reduced again in December, we can expect the economic situation to be more stable in 2021.
However, the drop in BI7DRR interest rates should be followed also by mortgage rates. When the BI7DRR interest rate dropped 20% in November 2020, compared to the beginning of 2020, the mortgage rates for both landed and vertical housing fell by only around 4%.
Property searches increase in satellite areas
Property search trends in Rumah.com continue to rise despite the pandemic, especially in the Jabodetabek area.
Property search trends in Rumah.com continue to rise despite the pandemic, especially in the Jabodetabek area.
Property searches in West Java in the third quarter of 2020 increased quarterly and yearly. Cities in West Java attracting the most searches were Bekasi and Bogor. Property searches also increased in Banten, quarterly and yearly. The city attracting the most interest in the Banten province was Tangerang City.
Better infrastructure is driving the interest, as gauged by online searches in Bogor, Bekasi, and Tangerang City, as access to areas with more affordable prices becomes easier.
DKI Jakarta also saw an increase, albeit not as large as West Java or Banten. Online property research in the capital region increased by 59% (QoQ) and 143% (YoY).
The most frequent type of search on Rumah.com was for homes with a price range of Rp300 to Rp750 million. Meanwhile, if combined, the amount of total property searches in the under Rp1.5 billion price range made up 61% of the total searches.
In other words, those looking for property via Rumah.com come from middle and middle-high income groups, consumers who are not concerned about distance from the city or business centers.
Demand expected to increase next year
The main effect of the COVID-19 pandemic according to the majority (60%) of respondents is the postponement of property transactions. Three out of five respondents to the Rumah.com Consumer Sentiment Survey said they would postpone property transactions. Not to worry, however, as the majority said they would resume the process in 2021. Meanwhile, around a quarter of respondents indicated they would avoid areas flagged as red zones (high COVID-19 case count).
The Large-Scale Social Restrictions (PSBB) worked to make people spend more time at home. This also impacted the outlook on new homes. The Rumah.com Consumer Sentiment Survey data showed that 34% of respondents are now more aware of the need to own a house.
Key internal factors affecting property purchases included ownership status. This factor was chosen by 63% of respondents, followed by price (48%), and the house’s facilities (41%).
Meanwhile, location (85%) and security (60%) are the external factors considered most important by respondents. Other external factors are public facilities around the housing area (48%) and public transportation (47%).
Meanwhile, location (85%) and security (60%) are external factors considered the most important by respondents. Other external factors are public facilities around the housing area (48%) and public transportation (47%).
Big Property Bets in 2021
Connectivity and price will still be the main focus of the property market in 2021. Distance to the city center is no longer the primary concern, as long as the route is relatively convenient and there is less traffic. That’s why areas around integrated residential areas (planned communities), new toll roads, and public transportation routes are still very attractive.
With that, Rumah.com analyzed a number of areas predicted to be targets for consumers in 2021.
.
DKI Jakarta
The region with the brightest future in DKI Jakarta is East Jakarta, due to prices, which are the most affordable compared to other DKI areas. Today, the average price in DKI Jakarta is around Rp27 million per square meter. Meanwhile, the average price in East Jakarta is Rp16 million per square meter, or around 45% lower.
The emergence of new townships and planned communities shows that developers and suppliers confidence are seeking to attract consumers with more to spend. One of these areas is Jakarta Garden City (JGC) in Cakung. The RIPMI Price Index shows that the presence of these integrated residential areas have seen Cakung prices rise by 4% per year. Meanwhile, already established areas of JGC, such as Pulo Gebang, have seen 10% quarterly and 15% yearly growth.
Bekasi
During the first quarter, Bekasi drove the West Java property price inde. While other cities in West Java showed an increase no more than 2% (QoQ), the property price index for Bekasi saw an increase of up to five percent for landed houses. Jatiasih and East Bekasi were the areas with the highest increases.
For consumers, property prices in East Bekasi are still pretty affordable and there is the promise they will continue to climb in the future. This is supported by the government’s efforts to tidy up the situation for commuters, through a number of infrastructure projects, such as Bekasi-Cawang LRT, elevated roads, as well as the more long-term Balaraja-Cikarang MRT project.
Greater Tangerang
Tangerang and Cipondoh sub-district were the two most promising areas in the Tangerang City region in 2020. Based on Rumah.com’s analysis, these two areas have complete public facilities and various options for public and private transportation.
Despite not having many public facilities in Cipondoh, residents still benefit from malls, shopping centers, and middle-high hospitals in nearby West Jakarta.
Meanwhile, the Tangerang sub-district has become the center of Tangerang City, with the support of public facilities and mass transportation infrastructure. The area boasts five malls - including the famous TangCity Mall and Lippo Karawaci, as well as two KRL commuter line stations, and easy access to the airport and the Jakarta outer ring toll road. In addition, the Cinere-Serpong toll road which is scheduled to open at the end of 2020 or early 2021, will lift surrounding areas such as Pondok Cabe, Serpong, and Pamulang.
Meanwhile, the Tangerang sub-district has become the center of Tangerang City with the support of public facilities and mass transportation infrastructure. There are two KRL commuter line stations, easy access to the airport and the Jakarta outer ring toll road, and five malls, including the famous TangCity Mall and Lippo Karawaci.
In addition, the Cinere-Serpong toll road which is scheduled to operate at the end of 2020 or early 2021, will lift surrounding areas such as Pondok Cabe, Serpong, and Pamulang.
Depok
Property development in Depok in 2021 will center around Cimanggis, Cinere, and Sawangan. Again, new toll roads, namely the Cimanggis-Cibitung, Cimanggis-Cinere, and Cinere-Serpong will be the main factors. Cimanggis and Sawangan will become new alternatives for homebuyers in Depok, who have always focused on the Margonda area.
