The decline in demand is due to seasonal trends coupled with rising benchmark interest rates and macroeconomic conditions globally, according to Marine Novita, the Country Manager of Rumah.com.
During the year-end holidays, people tend to spend more on consumables like Christmas and New Year’s celebrations and vacations with their families, which is why the fourth quarter of 2022 saw a decrease in interest in the residential property market.
This drop in demand was seen in both the landed property and apartment sectors, with demand for landed property dropping by 41% and demand for apartments dropping by 34%.
Despite the decline in the demand index, demand for housing in Q4 2022 was still dominated by the landed property, accounting for 92% of total housing searches. Marine explained that post-pandemic property trends are returning to their annual cycle.
Before the pandemic, the second and fourth quarters were typically “quiet” periods for the property sector, as consumers focused more on consumption during these periods.
If consumers were more focused on shopping for Hari Raya Idul Fitri and traveling during the second quarter, they would be more focused on year-end shopping and vacations during the fourth quarter. Developers responded to this trend by delaying the launch of new units and holding off on price increases.
Marine believes that consumer purchasing power will still be maintained because the trend for properties priced above IDR 1 billion continues to rise. Despite the stagnation in Q4, some areas in Jabodetabek, such as the districts of Tangerang and Bogor, showed positive trends.
According to Rumah.com’s Indonesia Property Market Report Q1 2023, the price index rose slightly by 1% quarterly in Q4 2022 and the supply index rose very slightly by 0.3%.
Although the price index increased slightly quarterly, the annual trend still showed a moderate increase of 5.8%, and the national supply index increased by only 0.3% quarterly and a moderate increase of 6.8% annually.