Demand for premium expat housing drops in jakarta _ asia news network

Since the oil and gas as well as mining industry have been hurt by low commodity prices in recent years, multinational corporations in the sectors have decided to cut costs by deploying their foreign workers in the country for shorter tenures.

“Two years ago, expatriates would generally work in Indonesia on a two-year assignment. Database administrator Now, many companies are starting to make budget cuts that result in shorter deployment periods,” Colliers International senior associate director Ferry Salanto said on Thursday.

In 2016, the number of Americans working in Indonesia fell by 25 percent. Database acid Meanwhile, Chinese expatriates, who showed the most significant increase in Indonesia by 21 percent, were not able to replace the declining demand in the premium housing market. Database 10g As Chinese expatriates often abide by stricter budgets, they choose to pick residences close to their workplaces.

Colliers reported that the occupancy rates of leased apartments in Jakarta fell by 1.2 percent quarteron-quarter (qoq) to 71.7 percent in the fourth quarter of 2016, mainly as a result of the growing trend of shorter leases by foreigners.

He said that multinational companies (MNCs) that have to cancel or pull back on their projects in Indonesia have tried to recover their money by subleasing their rented properties to someone else.

In addition, MNCs now prefer to send expatriate workers from Asian countries instead of Westerners to reduce costs, Ferry said. Database news For example, the number of South Korean expatriates working in Indonesia increased by 11 percent in the first 11 months of last year.

Data from the Manpower Ministry shows that the number of expatriates working in Indonesia actually surged to 74,183 from January to November 2016, much higher than the full year of 2015, which stood at 69,025. Database key value However, most of them are unlikely in the market for premium housing.

With the current trend, landlords — particularly of individually owned houses — have become more flexible in renting their properties. Data recovery pro review Some of them decided to slash rental prices to make prices 15 to 20 percent cheaper, Gene Sugandy, Colliers’ department head of residential tenant representation said.

“Landlords have become more cooperative and flexible. Data recovery windows 8 They are willing to fulfill additional requests from foreigners, which they previously weren’t willing to do,” she said.

The Colliers report noted that expatriates still prefer to stay in South Jakarta as it provides facilities for them, such as international schools, entertainment centers, shopping spots and golf courses.

Other areas, like Bumi Serpong Damai (BSD) and Lippo Karawaci have become their secondary choices as those locations have easy access to Soekarno-Hatta International Airport.

Gene mentioned that the current rental price for foreigners for a studio apartment in the Cikarang area stands at US$1,000 to $2,000 per month. Data recovery devices A 500 square meter house in Pondok Indah is leased at $3,000 to $5,000 per month, while a 700 sqm house in Menteng is somewhere between $5,000 to $10,000.

In general, Colliers projects that some of Indonesia’s property sector will improve on the back of a better macro-economic environment in 2017 but parts of the sector will still face challenges.

The apartment sector will foresee an improvement in demand due to the impact of a set of relaxed regulations introduced last year, including relaxation for second home buyers and tax cuts on home sales for developers to 2.5 percent of the transaction price, from 5 percent previously.

However, that relaxation seems ineffective in helping to boost the premium apartment market for expatriates. Moto g data recovery software Gene explained that the demand for housing from expatriates had declined because several government regulations have hindered foreigners from staying in Indonesia.

Some examples are immigration regulations that require foreign employees’ working permits to be renewed annually, as well as complicated procedures to obtain working permits.

“Even if there is a company that wants to hire foreigners, the process to obtain working permits can take up to six months,” she said, adding that without a change in government policies, the chance to revive demand in the expatriate housing sector is slim.