Looking at the Property Business in the Middle of a Pandemic

 

The corona pandemic that never ends makes people forced to coexist with the virus. But inevitably, not alllines can come to terms with living life with this virus.

One of them,the business line of the property sector whose performance plummeted due to the lack of business movement in the middle of the pandemic. Bank Indonesia survey results stated that the Residential Property Price Index (IHPR) in the first quarter of 2020 slowed by 1.68 percent, lower than the previous quarter of 1.77 percent and the same period last year of 2.06 percent.

 For  sales, it recorded a sharp decline in the first quarter of 2020 of -43.19 percent yoy for residential properties. This figure is much lower than the previous quarter which grew despite only 1.19 percent . Asfor, the decline occurred across all types of houses.

The data actually reflects the current condition of the property industry. Chairman of the Organization Consideration Board DPP Real Estate Indonesia (REI) Soelaeman Soemawinata or  familiarly called Eman mentioned, this situation has reached a severe stage.

Further, in the absence of sales,then revenues are also hampered. Meanwhile, there are many obligations that must bemet, ranging from workers to banks and investors.

Projects currently underway are also threatened to stop, especially for newly planned housing to be built.

"There are some who are forced to still walk,because it is nearing completion and is approaching handover to consumers. Projects that are just starting to stop first ,let alone stock  houses,we stop first ,"he said.

Circumstances like this,admitted Eman,make it difficult for property industry players to plan business mapping  accurately.

"Especiallythis condition we do not know the end of when," he said.

Previously, Bank Indonesia survey results recorded, residential property sales decreased significantly. Primary residential property sales in the first quarter of 2020 decreased on a quarterly basis.

Home sales in the period recorded a contraction of -30.52 percent (qtq). Deeper than the contraction of -16.33 percent (qtq) inthe previous quarter. Including in thefirst quarter of 2019 of 23.77 percent (qtq).

"Home sales recorded a contraction of -30.52 percent (qtq),"said Head of CommunicationDepartment, Bank Indonesia, Onny Widjanarko in a press release.

The decrease occurs in all types of houses. Large type houses (41.01 percent, qtq), medium type houses (-34.39 percent, qtq),and small type houses (-26.09 percent, qtq).

  Annually, residential property sales in the first quarter of 2020 also showed a deep growth contraction of -43.19 percent (yoy), from 1.19 percent (yoy)in the fourth quarter of 2019.

The respondents admitted that mortgage rates are still quite high. So this becomes the main factor that causes residential property sales growth is still hampered.

Although the average mortgage rate in Q1-2020 was  8.92 percent. Down from 9.12 percent in the fourth quarter of 2019.

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