Moody's cuts Indonesian developers' sales growth forecast on latest Covid-19 outbreak

INDONESIA'S property sector will continue to suffer amid the Covid-19 pandemic, despite recovering demand for private homes, according to a report on Thursday.

Moody's Investors Service expects retail asset demand to stay depressed in the next six to 12 months on weak retail sales, while telecommuting will hurt the office market and "industrial land sales will stay weak as companies hold back capital spending".

Meanwhile, supply and demand for the residential segment are projected to remain stable, with the market driven by housing projects in the one billion rupiah (S$94,000) range.

Private home sales are also expected to be lifted by higher loan availability from banks, with mortgage loans growing at a faster rate since the start of the year.

Said Moody's senior credit officer Jacintha Poh: "This suggests that financing is available for home buyers, which will support residential property sales."

But "a resurgence of coronavirus infections will slow the pace of recovery", the report warned. Moody's estimated sales for the six developers under its coverage will grow by about 5 per cent year on year, down from the 10 per cent growth forecast in February.