Mardika Parama, Dzulfiqar Fathur Rahman and Marchio Irfan Gorbiano, Jakarta – Singaporean property start-up 99 Group has recorded shrinking housing supply and demand on its websites in the third quarter as property agents and consumers return to conventional transactions, company executives have said.
The group, which owns the 99.co and rumah123.com platforms, recorded a 24.6 percent quarterly decline in housing listings on their websites in the third quarter while demand for housing on the sites dropped 6.2 percent from the previous quarter.
The group's data analyst, Rayhanali Heiko Amier, told The Jakarta Post on Tuesday that the relaxation of large-scale social restrictions (PSBB) in the urban areas such as Jakarta had driven transactions back to conventional means.
"Everyone has begun to return to the pre-pandemic pattern of property transactions," Rayhanali wrote in an email.
He also noted that purchasing power remained weak after Jakarta's decision to reimpose full PSBB from Sept. 14 to Oct. 10. "It will probably affect the market in the beginning of the fourth quarter if the current condition remains," he said.
As the COVID-19 pandemic discourages people from leaving their homes, property developers and agents have been shifting their marketing strategies in favor of online platforms and online events and exhibitions.
One of Indonesia's major property developers, Ciputra Group, reported in late May that it had booked Rp 130 billion (US$8.85 million) in sales of houses marketed through its recently developed online platform from April 18 to April 26. The houses had an average price of Rp 250 million and were located in the developer's Citra Maja Raya housing complex in Lebak regency, Banten.
However, cooling economic activity has pressured consumers, forcing them to seek inexpensive property. About 38.1 percent of the demand on 99 Group's websites is for property below Rp 300 million.
Some 22.4 percent of the group's property listings are targeted at the upper-middle-income segment, with prices from Rp 2 billion to Rp 5 billion.
Bank Indonesia's quarterly Residential Property Prices Index (IHPR) survey found that residential property sales had declined 25.6 percent year-on-year (yoy) in the second quarter amid rising unemployment and declining consumer spending.
Household spending fell 5.51 percent yoy in the second quarter as the country's gross domestic product (GDP) contracted 5.32 percent in the period, Statistics Indonesia (BPS) data shows.
Despite the bleak economic condition, 99 Group country manager Maria Herawati Manik said demand for property would remain strong in the year's final quarter particularly from first-time home buyers.
"We believe that consumers' interest in properties will remain strong in the fourth quarter. However, developers and agents need to address customers' concerns and convince them that right now is the time to buy property," she said during an online press conference on Monday.
Th group hopes the government mortgage loan interest subsidy will boost housing sales in the fourth quarter.
"We are sure the stimulus will [boost demand] because consumers will have more breathing space to manage and set their budgets," Rayhanali said.
On Sept. 25, Finance Minister Sri Mulyani Indrawati signed Ministerial Regulation No. 138/2020 on procedures for the National Economic Recovery program's subsidy disbursement plan, which details provisions on the mortgage loan interest subsidy.
The interest subsidy, which ranges from 3 percent to 25 percent in the first three months of the loan depending on the borrower's loan ceiling, is available for a maximum property size of 70 square meters. Only loans of less than Rp 10 billion are eligible.