THE NEW REALITY IN REAL ESTATE MARKET AFTER COVID-19

Presented by
ALVIN ALEXANDER
Managing Partner Residential Services Coldwell Banker Indonesia
THE NEW REALITY AFTER COVID-19

• Covid-19 may permanently change the way

people live in the future
• For example, there will be less demand for
business travel when people realize that video
conference prove sufficient
• As a result demand for hospitality property
and short term lease may probably decrease,
even after the pandemic end
THE NEW REALITY AFTER COVID-19

• However a crisis like this also acts as a

tangible reminder that real estate preserves
value
• The real estate market is subject to
fluctuations and changes, but it plays an
elementary role – on a personal level, by
covering one’s own housing needs
• Let’s see some data
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• As per May 12, 2020, IHSG has fell by 31.99% (ytd)

• Compared with 3 years ago (May 2017), IHSG has fell by
20.89%
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How are property prices in

the past 3 years?
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Indeks Harga Properti Komersial Jakarta

Sumber : Bank Indonesia
108,00

106,00

104,00

102,00

100,00

98,00 Apartemen Sewa

96,00 Perkantoran Sewa

94,00 Perkantoran Jual

92,00 Warehouse Complex

90,00

88,00

86,00
I II III IV I II III IV I II III IV
2017 2018 2019

• Best performer is the warehouse complex – 7% increase from Q1 2017 to Q4 2019

• Worst performer is the office leasing – a 7.3% decrease from Q1 2017 to Q4 2019
• Apartment leasing – 2.77% decrease from Q1 2017 to Q4 2019
• Office sales – 2.55% increase from Q1 2017 to Q4 2019
THE NEW REALITY AFTER COVID-19

Indeks Harga Properti Residensial Jakarta

Sumber : Bank Indonesia
350,00

300,00

250,00

200,00 Uk <36 m2
150,00 Uk 36-70 m2
Uk >70 m2
100,00

50,00

0,00
I II III IV I II III IV I II III IV
2017 2018 2019

• Small type residential (below than 36 m2) – 11.54% increase from Q1 2017 to Q4
2019
• Large type residential (more than 70 m2) – a 2.81% increase from Q1 2017 to Q4
2019
• Middle type residential (36 to 70 m2) – 7.26% increase from Q1 2017 to Q4 2019
THE NEW REALITY AFTER COVID-19
IMPACT OF COVID-19 ON REAL ESTATE
THE NEW REALITY AFTER COVID-19

• Demand for apartment

dropped by 68.8% in
Jakarta in Q1 2020
• Buyers hold transaction
because of social
distancing

source : Coldwell Banker Commercial Indonesia

THE NEW REALITY AFTER COVID-19

• Office occupancy is in
the range of 76.6% (for
grade A) to 87.8% (for
grade C)
• Very limited leasing
activities
• Many companies
reconsider any kind of
expansion and
relocation plan
source : Coldwell Banker Commercial Indonesia
THE NEW REALITY AFTER COVID-19

• Absorption of
warehouse dropped by
56.2% in Q1 2020.
• Demand is dominated
by logistic based
companies
• 80% of the
manufacturers believe
that the pandemic will
have financial impact on
their business
source : Coldwell Banker Commercial Indonesia
THE NEW REALITY AFTER COVID-19
THE NEW REALITY AFTER COVID-19

• We see that the most survived sector is the landed

housing, particularly for the low to middle segments.
The demand is generated by end users.
• At Q1 2020, the total supply of landed housing in
Greater Jakarta primary market, was estimated at
about 123,199 units. About 67.5% are already sold,
leaving about 38,776 units unsold.

sources : Coldwell Banker Commercial Indonesia

WHAT’S NEXT ?
THE NEW REALITY AFTER COVID-19
THE NEW REALITY AFTER COVID-19
THE NEW REALITY AFTER COVID-19
THE NEW REALITY AFTER COVID-19
THE NEW REALITY AFTER COVID-19
THE NEW REALITY AFTER COVID-19
THE NEW REALITY AFTER COVID-19
THE NEW REALITY AFTER COVID-19
THE NEW REALITY AFTER COVID-19

• The speed of the market rebound will depend on the

period of the pandemic and the pace at which
functionality returns coupled with investor confidence.
• U,V or W shape of rebound
• Opportunistic purchasers can be the gainers in this
pandemic as they are actively seeking to take
advantage of the period of inevitably reduced liquidity
• Agile working – where people choose where, when
and how they work, with maximum flexibility and
minimum constraint – can be a new norm.
THE NEW REALITY AFTER COVID-19

• It doesn’t mean that the demand of office will be less,

because companies may require less desk-space per
head
• With more of online grocery shopping there will be
higher demand of warehousing space
• Lockdown period teaches us that we can bring our
own fitness equipment into our house but not the
swimming pool (at least for most of the population).
So people may look into apartments that are not
crowded and offer convenient living.
THE NEW REALITY AFTER COVID-19

• Developers shall differentiate themselves by investing

in technology that bring digital-first experiences such
as contactless access for residents, virtual
communities, on demand delivery and concierge
services, and so on.
• Real estate agents will adopt the new way of doing
brokerage jobs. Virtual open house and the use of
digital signature for transaction administration will
become a new normal.
THE NEW REALITY AFTER COVID-19

THANK YOU

alvin@coldwellbanker.id
081280005435