Surge in Indonesia's home prices seen continuing despite monetary easing

Published Wed, Oct 23, 2013 · 10:00 PM
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[JAKARTA] Indonesia's most aggressive monetary tightening since 2005 is set to slow economic growth without denting soaring property demand in the world's fourth-most populous nation.

A young population, elevated inflation and property-price gains that outpace interest rates are spurring real-estate sales from Jakarta to Manado. Home prices in the third quarter probably rose 14.6 per cent from a year earlier, according to a Bank Indonesia survey, while the Indonesian Real Estate Association predicts housing sales will climb more than 50 per cent this year.

"Indonesia has a huge population, that's a potential market for us," said Setyo Maharso, chairman of the Indonesian real estate association, which predicts 2013 property sales will rise to 400,000 units from 260,000 last year. "For our buyers, as long as they have the ability to pay monthly instalments, sales will keep increasing till the year-end."

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