Jakarta Property Highlight recently released a report that indicated a slight 2.1% increase in the occupancy rate of rental apartment in Jakarta during the second semester of 2022, with the occupancy rate reaching 60.9% compared to the previous semester.
Additionally, the average rental price for apartments saw an annual growth of 0.99% (yoy). According to the Senior Research Advisor of Knight Frank Indonesia, Syarifah Syaukat, the easing of the pandemic with the lifting of the PPKM restrictions led to a slow revival of the apartment rental business in Jakarta towards the end of 2022.
This was further boosted by the arrival of foreign nationals from Japan, India, and Korea for business activities in Indonesia.
The report also highlighted that the domestic market played a significant role in the occupancy rate of short-term rental apartments through the staycation trend, which continued until the end of 2022.
The supply of rental apartments increased to 9,395 units by the end of 2022, and according to Syarifah, there will be an additional 1,876 new units entering the market by 2028.
Moreover, the growth of Indonesia’s economy had a positive impact on the apartment rental business, as per the Country Head of Knight Frank Indonesia, Willson Kalip.
However, he also cautioned that external factors, such as the global recession, could impact the sector, particularly as the suboptimal performance of rental apartments at the end of 2022 raised concerns.
Condominium as a New Residential Trend despite Rental Apartment
The report also revealed that 6,222 new condominium units were added in Jakarta during the second semester of 2022.
Consumers preferred selective condo-buying based on certainty, and sales growth reached 95.7% in the second half of 2022. Ready-to-live-in condominium units were the primary choice for consumers due to the certainty of available units.
The report noted that South Jakarta remained the largest catchment area for the new condominium market, with 40% of transactions primarily from the middle class.
However, almost half of the new condominium projects increased their prices at the end of 2022, followed by a 0.9% price strengthening on existing units.