House prices fell by 0.52% y-o-y in Q2 2020

Indonesia’s housing market is now evidently cooling, with the residential prices in the country’s 14 largest cities falling by 0.52% during the year to Q2 2020, following y-o-y declines of 1.2% in Q1 2020, 0.65% in Q4 2019, 1.68% in Q3, 0.94% in Q2 and 0.36% in Q1. House prices dropped slightly by 0.02% q-o-q during the latest quarter.

Demand is plunging

Residential property sales dropped sharply by 25.6% in Q2 2020 from a year earlier, following a decline of 43.2% in Q1 2020, according to Bank Indonesia. Sales saw double-digit rises from 2013 to 2015.

Housing loans disbursed by banks increased by a modest 3.5% y-o-y in Q2 2020, a slowdown from annual growth of 4.34% inQ1 2020, 8% in Q4 2019, 8.1% in Q3, 12.8% in Q2 and 15.7% in Q1.

3. Rents, rental yields: yields are high in Jakarta at 7.09%

Apartment costs in Jakarta are low, at around $2,595 per sq.m. 

Indonesia: city centre apartment, buying price, monthly rent (125 sq. m.)

  Buying price Rent per month Yield

Jakarta $311,400 $1,840 7.09%

Recent news: Indonesia’s economy shrank by 5.32% in Q2 2020 from a year earlier, its first contraction since the 1998 Asian Financial Crisis, as household spending and investment growth dropped rapidly amid the COVID-19 outbreak.

Recently, the Indonesian government revised its 2020 economic forecast for the country to a range of -1.1% to 0.2%, down from its earlier estimate of -0.4% to 2.3% and its 2019 growth of 5%. In June 2020, the government unveiled a stimulus package worth around IDR 677.2 trillion (US$46.3 billion) to boost the slowing economy.