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GLOBAL PROPERTY REVIEW

December 17, 2018

Java, Indonesia

 

 

Dramatic, sometimes conflicting, changes in a country’s fiscal and monetary policies always has a real estate angle. Either property needs to attract buyers, cool over-speculation, or in the case of Java - the largest island in Indonesia - a mix of both.

 

Java is the main island in Indonesia and the most populous, containing just over half of the country’s population including the capital, Jakarta. 

 

The market outside a capital city often tells a more complete national story. As background, Indonesia’s central bank has hiked interest rates to combat inflation driven by a sell-off in emerging market currencies. 

 

Not good for mortgages, one might say. However, banks have seen the reins of their home lending policies loosened - potentially bringing more first-time buyers to the table and adding some liquidity to the credit books of banks. 

 

First time buyers have also, since August, have seen the required 15 per cent of the house price relaxed - another perk, despite the higher Base rates. 

 

It is indeed an attempt to stimulate a property market that has fallen into sluggish territory that is the cause of these home loan rules. The bank’s governor said so himself, citing the multiplier 

effect of steadily rising prices and a decent secondary market. 

 

Nevertheless, higher mortgage costs and certain restriction to foreign buyers saw Standard & Poor’s take a look and expects little net gain for property sales this year. 

 

This would starkly contrast the performance of cities outside the capital last year: Surabaya rose 6.86 per cent for the year up to Q3 2017, followed by Bantung (5.22 per cent) and Jabodebek-Banten (3.65 per cent), according to Bank Indonesia.

 

 

 

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Plymouth 

 

‘Brexit-Shmexit’ seems to be the buoyant attitude of house buyers in Devon. The biggest city in the county has experienced a quiet but steady rise in house price appreciation in the last few years, including the last two and half years since that EU referendum. Sales are up overall

 

Property prices rose 3.2 per cent for the 12 month period up to July this year, data from Office of National Statistics Show. Prices rose 0.4 per cent against June. That’s a GBP 31,000 average jump in a year.

 

The average home is GBP 176,257 - good in historical context in the city and significantly less than the circa GBP 230,000 UK average, which is similar to the average for the South West as a whole (GBP 243,1872 - Nationwide Building Society). Savills told local media that part of the city’s appeal has been from buyers in Greater London looking to stretch their pounds outside the South East.

 

But as prices rise in any city, some can still be priced out, tempering any bidding war. Data from home.co.uk found that only detached houses were selling faster this month compared to December last year - down 8 per cent to 131 days listed. Flats are listed for 17 per cent longer.

 

 

It’s been a good year at the luxury top-end. PlymouthLive flagged up some stunning houses located along the coast just outside the city, close to villages such as South Ham, Yealmpton and The Hoe. Indeed, if sea views and a broad range of houses in the four-bed category tick your boxes - from farmhouses to hillside penthouses - the area is worth consideration. Four-bedrooms are shifting faster than last year, home.co.uk also found.

 

 

 

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Beijing

 

It’s an interesting time across the real estate spectrum in the Chinese capital, brining together residential with movements in the retail, office, and industrial sectors. 

 

Rents overall in Asia Pacific grew 1.2 per cent for Q3 against Q2. Beijing saw moderate rental growth, along with Shanghai. The outlook for leasing in the region is very positive, according to 

Jones Lang LaSalle.

 

As perhaps a sign of the times for growth industries, e-commerce companies, 3PLs and manufacturing dominate the logistics space sector in China, JLL’s snapshot of Asia Pacific in Q3 found.

 

In the residential sector, more restrictive lending policies have contributed to a reduction in demand for property across most price-points, or at least, a fall in transactions. 

 

Beijing is twinned with Singapore in seeing a general growth in the rental of prime residential property. Data from China Real Estate Association estimated a 22 per cent rise in rent this year; equal to Guangzu but lower than the eye-watering 30.9 per cent rise in Chengdu.

 

Grade A office space rental inflation is slowing, although still stood at 4.2 per cent for Q3 against the same point last year. Landlords can afford to be picky with tenants given the limited vacancies, and this has supported the ongoing growth, despite the overall slowing. 

 

There was just one significant project completed in the quarter just gone. The lack of supply is expected to adjust somewhat next year, as delayed developments in the commercial business districts look to complete and deliver more units. 

 

Overall, the 66 plots of land earmarked by the government for residential development in September should temper further the rental growth.

 

 

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