Jakarta’s Property Is Predicted to Keep Rising Even Though the Capital Moves


DKI Jakarta will soon no longer be the nation’s capital. Even though the capital is moving to East Kalimantan, the property business in Jakarta is predicted not to be affected and will continue to grow.

Vice President of Finance 99 Group Indonesia Timothy Alamsyah believes that instead of being afraid of the market receding in Jakarta and moving to the new State Capital (IKN), Jakarta has great potential for developers and consumers.

“There is a fear that the property market will flee to Kalimantan, in my opinion, it is not something we need to be afraid of. The property market is very massive, especially on the island of Java,” Timothy said in a presentation on the Indonesia Property Market Review 2022, Friday (26/8/2022).

He believes the property is a need that will continue to grow and the demand can be even more massive in the future, as a country’s population grows.

If IKN enters another island, this will certainly have an impact on reducing crowds in Jakarta. Thus, congestion and so on will also be reduced. This is what can raise house prices in Jakarta.

“In my opinion, for example, if there is a relocation of the capital city so that Jakarta becomes less crowded, that is actually a good thing for increasing property prices in Jakarta,” he explained.

On the other hand, CEO of Indonesia Property Watch Ali Tranghanda emphasized that moving IKN does not mean moving Jakarta to IKN Nusantara.

“This IKN is not moving Jakarta to IKN, with IKN we are creating a new growth center. Not moving Jakarta there, so does it mean that Jakarta will be deserted? Not really,” he said.

According to Ali, Jakarta can become a lonely city if the business center and financial center also move to IKN. However, currently, Jakarta remains the center of economic growth.

“What should be noted is that within one city there is a name called suburbanization, in the buffer areas of Jakarta that were previously not ready, now they are starting to become a little bit ready to become one city,” said Ali.

According to him, the phenomenon of suburbanization can cause cities around Jakarta to pile up. Previously, suburbanization occurred because the suburbs of Jakarta were considered to have a cheaper land value.

Suburbanization is interesting because it will encourage a more comfortable Jakarta to be a place to live. The more people from Jakarta choose the suburbs, the more comfortable Jakarta will be.

“It can actually lift other than business in Jakarta, the level of pollution and comfort is what creates added value for the area,” he added.

Furthermore, Ali assessed that the transfer of IKN was quite good in terms of population distribution. The reason is, that currently more than 50 percent of Indonesia’s economic area and population are mostly on the island of Java.

“But it does take time, we can’t say 5 years for IKN to be finished. I’m counting 40 years and it’s only been 40 years. Unless you just move the government there it can take 5 years. But to form an economic base there it takes time, but it must be started, If it doesn’t start, it won’t happen,” he said.