Property Sector Upper class landed housing solid sales growth - DBS Vickers

Upper class landed housing sales in 5M11 has grown by c.15% y-o-y. 1Q11 sales in Jabodetabek has experienced stronger growth than the industry as sales rose three-fold to 514 units from 141 units in 1Q10. Upper class landed houses are houses priced between Rp800m to Rp2bn per unit. According to Teguh Satria, Asia Pacific FIABCI President, solid economic growth and stronger purchasing power have supported this growth. With the strong economic growth, there is a demand for alternative investment options. Property is popular investment option as property is a relatively safe and stable investment with reasonable return.

Looking at the industry cycle, it is expected that property’s performance for the rest of the year will be slower than 5M11. Generally, housing sales normally decline in mid-year as preparations are underway for the new school year. As Eid ul-Fitr (which will fall in late August this year) approaches, sales will also slow down as people will spend more on for the festive season. Across the board, major property developers are trying to ride on the industry upcycle. The major players have strong launch pipelines with numerous new projects being marketed. The market has responded well with good take up rates.