RESIDENTIAL PROPERTY PRICE SURVEY

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1 RESIDENTIAL PROPERTY PRICE SURVEY QUARTER IV Price and Sales of Residential Property Set To Further Increase Accelerating on residential property prices were indicated by the higher index (0.67%) from previous quarter (qtq) or 2.91% in annual (yoy). Residential property price pressures were predicted to continue in next quarter, although in a lower pace. Most of respondents (35.4%) stated that increasing price of building materials and higher worker s salaries were attributable to the mounting residential property price. Survey also revealed that the highest increase in price (0.96%, qtq) encountered for small type of building. Meanwhile, Manado led the price increase among 14 regions being surveyed by 3.04% (qtq). Residential property sales volume elevated by 2.76% (qtq) especially on large type of building (19.87%, qtq). Respondents remain considered that high house ownership loans interest rates, higher price of building materials, higher tax rates, and a tangle of red tape bureaucracy have been hampering the outgrowth of residential property business. Respondents also conveyed that internal funds, mainly come from retained earning, remained to be the primary source of their residential property project financing. Whereas in purchasing the house, most of consumers still used house ownership loans facilities with interest rate of 9% to 12% on average. Residential property price in quarter IV-2010 increased in monthly and annual basis Residential Property Price Development Residential property prices in quarter IV-2010 accelerated especially for the small type of building. Residential Property Price Survey embraced 14 big cities in Indonesia indicated that residential property prices index in quarter IV-2010 stayed at , moved higher from 0.48% in the previous quarter to 0.67%. Most of respondents (35.38%) stated that the acceleration in the residential property prices were attributable by the rising of construction materials price and higher worker s salaries (22.25%) as well as the higher of permittance fee (17.38%). Methodology Residential Property Price Survey is the quarterly survey which collected from 1999 based on development project from 12 cities, i.e. Medan Padang, Palembang, Bandar Lampung, Bandung, Semarang, Yogyakarta, Surabaya, Denpasar, Banjarmasin, Manado, and Makassar. At the first quarter 2002, coverage area of survey becomes 13 cities including Jabotabek (Jakarta, Bogor, Tangerang, and Bekasi) area. And at the first quarter 2004, coverage became 14 cities including Pontianak. Since 2007 the coverage survey area has been extended including Banten area (Serang and Cilegon). This survey covered 45 main developers in Jabodebek-Banten, and about 215 developers in 13 Bank Indonesia Regional Offices. Data collected directly from developer covered price and total sales in the recent quarter and prediction for the next quarter. Data processed by type of building, which are small type ( 36m2), medium type (>36 and 70m2), and large type (>70m2). Composite Index is developed by simple average chain Index weighted by the city weight resulted from Cost Living Survey 2007 by BPS. Real Sector Statistics Team 1

2 Both in quarterly and annual basis, small type of building encountered the highest price increase, whilst by region, Manado led the increase In quarterly, the highest price increase was at small type of building notably in Manado. Compared to previous period survey, the survey recorded that all types of building experienced price hike with the highest at small type of building (0.96%,qtq). By citiy surveyed, Manado led the increase (3.04%,qtq) especially for small type of building (5.94%). Residential property price was also rose higher in Jabodebek and Banten area, with the small type of building led the increase (0.86%). Graph 1 Residential Property Price Index (RPPI) (Index) (%) RPPI % Changes (qtq) % Changes (yoy) Residential property prices were also moved higher from the same period at the previous year. The residential property price index mounted 2.91%, higher from 2.31% in previous. Described by the type of building, price escalated in all types of building, with the small type of building led the growth by 3.66%. On the other hand, observed by region, the strongest price growth experienced in Manado (7.28%), specifically for small type of building (16.02%). In Jabodebek-Banten area residential property prices increased by 2.99% from 2.61% in the same period at the previous year mainly in the small types of building (3.78%). Graph 2 Residential Property Price Index (RPPI) For Small Type of Building (Index) (%) RPPI of Small Type % Changes (qtq) % Changes (yoy) Real Sector Statistics Team 2

3 Graph 3 Residential Property Price Index (RPPI) For Medium Type of Building (Index) (%) RPPI of Medium Type % Changes (qtq) % Changes (yoy) Graph 4 Residential Property Price Index (RPPI) For Large Type of Building (Index) (%) RPPI of Large Type % Changes (qtq) % Changes (yoy) Pressure on residential property prices in the quarter I-2011 were predicted to run by slow degree Mild pressure on residential peroperty prices were predicted in quarter I In quarterly basis (qtq), pressure on residential property price is predicted to ride slowgoing by 0.33% with the highest increase predicted to happen in small type (0.44%), while in regional basis price hike most in Padang (1.18%). Therefore in annual basis (yoy), residential property prices were also predicted to grow soflty by 2.53% especially for small type (3.28%) in Manado (7.71%). Decelerating price was also predicted in Jabodebek and Banten areas, both in quarterly and annual basis. Real Sector Statistics Team 3

4 RPPI grew in the same direction with housing category of CPI Compared with the housing group index in the Consumer Price Index (CPI) for quarter IV-2010, residential property price appeared to move in same direction. Housing group price index along quarter IV-2010 (December 2010) grew 1.12%, higher than 0.82% in previous. Therewith, Residential Property Price Index (RPPI) also moved higher by 0.67% than 0.48% in previous. (%) 4 Graph 5 Changes in RPPI and CPI Housing Group RPPI Changes Changes in CPI Housing Residential property sales for medium and large type of building were mounted, while small type was alighted on sales Residential Property Sales Residential property sales in quarter IV-2010 swelled by 2.76%(qtq). This period survey recorded that sales increased most in large type of building (19.87%) followed by medium type (3.31%). In the other side, sales on small type of bilding dropped by %. Table 1 Residential Property Sales Sales (Unit) qtq (%) TYPE TW I-2009 II-2009 III-2009 IV-2009 I-2010 II-2010 III-2010 IV-2010 TW I-2009 II-2009 III-2009 IV-2009 I-2010 II-2010 III-2010 IV-2010 Small 6,026 7,550 10,030 10,088 9,196 10,371 9,120 7,762 (4.35) (8.84) (12.06) (14.89) Medium 3,172 4,381 5,401 5,422 6,270 7,260 5,322 5,498 (10.57) (26.69) 3.31 Large 2,230 2,562 1,316 1,320 1,481 1,685 1,702 2, (48.63) AVERAGE (4.21) (12.58) 2.76 Residential property supply and demand in quarter IV-2010 held steady, and it is expected to continue in the next quarter Residential Properties Supply and Demand Residential properties supply and demand in 14 big cities were relatively stable. Most of respondents being surveyed stated that compared to previous period, in response to the strong demand and favorable economic condition, both of supply of and demand for residential properties in all type of buildings were remain stable. Respondents believed that the such condition will quite similar for next quarter, with the highest sales rate expected for small type of building. Real Sector Statistics Team 4

5 Meanwhile, high house ownership loans interest rates, higher price of building materials, higher tax rate, and a tangle of red tape bureaucracy were still recognized as the obstacle factors in doing residential property activity. Developers used internal funds most, while consumer preferred to use house ownership loans for financing. Residential Property Financing Respondents agreed that they most utilized internal funds in financing the residential property development, meanwhile consumers still prefered to use house ownership loans facilities (KPR) in buying a new house. Most of respondents (54.4%) conveyed that their financing needs were obtained from their internal funds primarily from retained earning (45.83%) and paid-in capital (43.14%), rest of them were acquired from banking loans (27.2%) and consumers advance payment (14.9%). Graph 6 Residential Property Financing Consumers Advanced Payment, 14.9% Others, 1.6% Non Banking Institution Loans, 1.9% Banking Loans, 27.2% Internal Funds, 54.4% Graph 7 Internal Funding in Residential Property Project Others; 7.63% Joint Venture; 3.40% Paid in Capital; 43.14% Retained Earning; 45.83% Real Sector Statistics Team 5

6 However, consumers most prefered to choose housing loan facilities (KPR) in buying their home. This period survey confirmed that the simplicity in acces accompanied with the lower rate of house ownership loans were attracted majority consumers (71.4%) to use the loan facilities in buying their home. Small house in particular (80.5%) with the interest rates in the range of 9 to 12%. In addition to use of KPR, the survey also found that only 18.4% respondents use cash installments to buy their new houses, and only a few respondent (10.4%) used hard cash payments method. Real Sector Statistics Team 6

7 Table 2 Residential Property Price Index Quarter IV-2010 Quarterly Changes (qtq) Annual Changes (yoy) NO CITY Building Type Building Type Small Medium Large All Small Medium Large All 1 BANDUNG BANDAR LAMPUNG BANJARMASIN DENPASAR PALEMBANG SEMARANG YOGYAKARTA PADANG MEDAN MAKASSAR MANADO SURABAYA PONTIANAK JABODEBEK-BANTEN All Cities Table 3 Expectation Residential Property Price Index Quarter I-2011 Quarterly Changes (qtq) Annual Changes (yoy) NO CITY Building Type Building Type Small Medium Large All Small Medium Large All 1 BANDUNG BANDAR LAMPUNG BANJARMASIN DENPASAR PALEMBANG SEMARANG YOGYAKARTA PADANG MEDAN MAKASSAR MANADO SURABAYA PONTIANAK JABODEBEK-BANTEN All Cities Real Sector Statistics Team 7

8 Residential Property Price Index By Regions (Base Year 2002 = 100) RESIDENTIAL PROPERTY PRICE INDEX QUARTERLY CHANGES (qtq) ANNUAL CHANGES (yoy) TYPE OF No. CITY BUILDING Q I Q II Q III Q IV Q I * Q I Q II Q III Q IV Q I * Q I Q II Q III Q IV Q I * 1 BANDUNG SMALL MEDIUM LARGE TOTAL BANDAR LAMPUNG SMALL MEDIUM LARGE TOTAL BANJARMASIN SMALL MEDIUM LARGE TOTAL DENPASAR SMALL MEDIUM LARGE TOTAL PALEMBANG SMALL MEDIUM LARGE TOTAL SEMARANG SMALL MEDIUM LARGE TOTAL YOGYAKARTA SMALL MEDIUM LARGE TOTAL PADANG SMALL MEDIUM LARGE TOTAL MEDAN SMALL MEDIUM LARGE TOTAL MAKASSAR SMALL MEDIUM LARGE TOTAL MANADO SMALL MEDIUM LARGE TOTAL SURABAYA SMALL MEDIUM LARGE TOTAL PONTIANAK SMALL MEDIUM LARGE TOTAL JABODEBEK-BANTEN SMALL MEDIUM COMPOSITE 14 CITY (Included Jabodebek - Banten) COMPOSITE 13 KOTA (Excluded Jabodebek-Banten) LARGE TOTAL SMALL MEDIUM LARGE TOTAL SMALL MEDIUM LARGE TOTAL *) Since 2009-Q1, the composite index calculated by weighted index using the city weight resulted from The Cost Living Survey 2007 by BPS. We do backcasting to the calculation of the composite index since 2002-Q1. Real Sector Statistics Team 8

250 Appendices 2016 ECONOMIC REPORT ON INDONESIA Bank Indonesia Regulations. No. Regulation Date Corcerning

250 Appendices 2016 ECONOMIC REPORT ON INDONESIA Bank Indonesia Regulations. No. Regulation Date Corcerning APPENDICES 2016 Bank Indonesia Regulations No. Regulation Date Corcerning 1 Bank Indonesia Regulation (PBI) No. 18/1/PBI/2016 28/01/16 Total and Nominal of Rupiah Currency Destroyed in 2015 2 Bank Indonesia