TEMPO.CO, Jakarta - CEO of Indonesia Property Watch Advisory Group Ali Tranghanda predicted that property prices will decrease in the second quarter of 2020. The decrease in property price is predicted to be the result of the slowing down of the property business as a result of the Covid-19 pandemic.
Ali said that the decrease in property prices may be experienced by the primary market and the secondary market, also known as the market for pre-owned properties.
"In the second quarter apparently there will be a five to eight percent decrease in the primary market, meanwhile the secondary market is still below five percent," Ali said on Thursday, May 7, 2020.
He also predicted that during the second quarter of 2020, the property business, including the residential segment, is experiencing heavy pressure. Signs of the slowing down of the property sector has been apparent since the first quarter of 2020 as reported through a survey conducted by IPW. One of the factors that decreases the prices of property is the decreasing demand and purchasing power due to economic uncertainty caused by the Covid-19 pandemic.
Moreover, the public prefers to save their funds or purchase other staple needs as the economic uncertainty continues.
"Demand level [of properties] can be because of decreasing purchasing power or decreasing interest [to purchase houses]," Ali said.
Nevertheless, Ali is confident that property prices will return to normal if economic conditions and purchasing power can be restored if the Covid-19 pandemic can be immediately halted.
Previously, IPW recorded that sales price of primary residence in the Jabodebek and Banten region during the first quarter of 2020 drops by 50.1 percent on average. IPW recorded the highest decrease occured in the Bekasi region with a 56.0 percent, followed by Bogor (55.3 percent), and Depok (50.9 percent). Meanwhile the lowest decrease occurred in Cilegon with 27.2 percent decrease.
Sales price in the first quarter is recorded to be at IDR 719 billion, which is considerably lower compared to the IDR 1.44 trillion recorded in the previous quarter. The lowest decrease occured within the under IDR 300 million hosues segment with 62.5 percent decrease (quarter-to-quarter) or equals to 68.8 percent (year-on-year).