The average price of luxury apartments in the Central Business District (CBD) area of Jakarta has shown a decline in recent years.
Luxury apartments in Indonesia’s capital were popular around the early 2000s and most recently in 2012. However, the development of luxury apartments has slowed down from 2016 onwards.
According to research from Savills Indonesia, apartment projects in the CBD area of Jakarta have much higher prices compared to other regions. Anton Sitorus, the Director of Research Consultancy at Savills Indonesia noted that apartment prices in the CBD peaked in 2013 and 2014, reaching approximately Rp 55 million per square metre.
In recent years, the development of apartments has declined, resulting in a drop in price for luxury apartments to approximately Rp 52 million per square metre. “Jakarta’s CBD accounts for more than half of the total luxury apartments in Jakarta, with a percentage of around 56%” reported Anton Sitorus on 28th July.
Outside the CBD area, South Jakarta’s luxury apartments dominate the market. According to Savills, the average price of luxury apartments in this area is around Rp 48 million per square metre, as of 2019.
“As a popular area for expatriates and wealthy people, South Jakarta dominates the supply in the Non-CBD area, contributing 36%,” he noted. Prices of luxury apartments in West Jakarta and North Jakarta have stayed relatively stable since 2017 when they were approximately Rp 27 million per square metre.
Saville predicts that the development of luxury apartments will remain low until 2023. To support the property sector, the government has exempted sales tax on luxury goods (PPnBM) for residents who have a property valued under Rp 30 billion.
A number of foreign developers have encouraged the development of luxury apartments in Jakarta and continue to do so. These foreign developers are interested in projects in Jakarta as there are a large number of individuals earning high income.
Some foreign developers include Hong Kong Land who built Amandamaya Suites, Pollux Properties who created Pollux Sky Suites, and Japanese Tatemono, developers of Sun and Moon.