Indonesia’s property market slowing sharply

The Indonesian residential property price index (16 major cities) rose by 3.1% during the year to Q2 2016, according to Bank Indonesia, but when adjusted for inflation, property prices in the country actually fell by 0.39% in Q2 2016 from a year earlier.  During the latest quarter, residential property prices rose by a meagre 0.36% (0.3% inflation-adjusted).

Nominal property price figures can be misleading in Indonesia, because inflation has been high (although now slowing). Residential property has been attractive to rich Indonesians and others partly as a protection against inflation.

All Indonesia’s major cities saw nominal property price rises during the year to Q2 2016. Batam led the price hikes with house prices rising by 10.65% (6.9% inflation-adjusted) during the year to Q2 2016. It was followed by Bandar Lampung (8.46%), Palembang (7.95%), Medan (6.25%), Bandung (5.77%), Makassar (5.66%), Banjarmasin (5.36%), Manado (5.27%), Surabaya(4.28%), and Padang (3.93%).

Please follow and like us: