RealEstat.id (Jakarta) – Colliers, a leading diversified professional services and investment management company, has announced the release of its Market Insights titled "Impact of Global Property Market on the Indonesian Property Market" on Tuesday, (20/6/2023).
Looking beyond Indonesia, the property markets in major gateway markets across Asia, as well as top-performing global markets in Western economies, have been negatively impacted by the global increase in interest rates by central banks.
This has led to higher borrowing costs, lower net operating incomes, and decreased property values attributed to higher capitalization rates.
Read More: 2022 Jakarta Property Market Overview and 2023 Outlook: Facing Global Economic Issue
Colliers Indonesia Head of Capital Markets & Investment Services, Steve Atherton mentioned that "the ongoing stand-off in developed gateway markets across Asia, the USA, and Europe, along with the deteriorating conditions concerning property values, loans, and borrowers returning properties to lenders, has resulted in a shift towards more conservative investment practices.
He added, foreign developers and property funds interested in investing in developing markets, such as Indonesia, will prioritize opportunities in low-risk sectors that offer high returns.
Although the Indonesian current property market may not be optimal for investors and developers, there are still viable opportunities to explore:
Read More: Colliers: Despite Headwinds, Key Asia Pacific Property Markets Sustain Robust Performance
1. Accessible debt and equity options are available for appropriate development and acquisition deals, particularly when partnering with reputable local counterparts.
2. Investors are interested in high-quality assets, especially those that are reasonably priced and located in desirable areas.
3. Landed housing continues to offer growth potential with healthy profit margins and a moderate level of risk, making it an attractive space for committed players of all sizes.
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