Jakarta home prices dropped 18 percent quarter to quarter. Actual article in ekonomi.bisnis.com – “Gawat! Harga Rumah di Jakarta Melorot Lebih Dari 18 Persen.”
Sometimes, title can be misleading
By the way, when we read just the title, it seems that home prices have dropped. However, we need to note that average transacted prices dropping can also be due to the fact that most of the transactions were for properties which are lower priced as well. So, it’s really important to go to the individual unit versus looking at just the average statistics which can be misleading too.
What if someone claims that property price has dropped 30 percent?
Another example, someone said, the price for this development has dropped 30 percent! Well, perhaps it’s true but for that particular unit simply because the owner was in financial distress. For all other owners within the same development but not in financial distress, none of them would want to sell their unit following the price of the financially distressed owner.
May also be due to auction case
This drop in price can also be due to the auction of that unit. Most of the time, potential buyers would only be interested with auction units if it’s 20-30 percent below market or more. The reason is because they could not enter those units to see the inside, thus higher discount is to cover any potential spending necessary for the unit once they become the owner for the unit.
Actual article in ekonomi.bisnis.com – “Gawat! Harga Rumah di Jakarta Melorot Lebih Dari 18 Persen.” Indonesia Property Watch (IPW) shared that the biggest decline in average house prices was not in Jakarata for quarter on quarter. It’s in Serang City, Banten and the decline was 19.6 percent.
There are areas where the average property price showed an increase instead of a decrease. For example, Tangerang where property pricres increased by 10.3%. Other cities showing an increasing trend include Depok City in West Java and Cilegon City in Banten. There are more areas experiencing negative price growth versus an increasing one. Please do read the Actual article in ekonomi.bisnis.com – “Gawat! Harga Rumah di Jakarta Melorot Lebih Dari 18 Persen.”
Yes, property prices can drop. It has been proven in every market including Malaysia
I think this latest news about Jakarta property market does show that property prices could drop in some neighbourhoods if not all neighbourhoods. During the 1998 ASEAN Financial Crisis, the property prices in Malaysia dropped by double digits for one year. It would show a recovery after the financial crisis has passed and the economy starts to roar back into life.
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