Jakarta residential demand to remain limited in the next 12 months

New serviced apartments are expected to be completed in 2024.

In Jakarta, a JLL report says there is a possibility of a new launch for an upper-grade condominium project in 1Q24. 

However, the decision to launch is expected to be influenced by market conditions, particularly as it is a political year for Indonesia. Demand will likely remain limited for the next 12 months.

Here’s more from JLL:

In 2024, the market is anticipated to see new additions to the supply of serviced apartments in Central Jakarta. Two notable projects, namely Ascott Menteng Jakarta and Parkroyal Serviced Suites, are expected to bring over 300 new units into the market.

Condominium demand experiences a slowdown

In 4Q23, condominium sales weakened due to the absence of new launches, buyers delaying transactions during the holiday season, and the added cautiousness surrounding the presidential election. However, it is worth noting that the total annual sales for 2023 still showed an increase compared to 2022.

The serviced apartment market witnessed a decrease in vacancy rates during the quarter, compared to 3Q23. Demand in 4Q23 was primarily fuelled by local visitors seeking to stay during the long holiday for short-term periods.

New project launches and completions remain limited in 2023

During the quarter, no new prime condominiums were launched or completed. In 2023, the market witnessed the introduction of only two new projects: Adriya Residence and Two Senopati. Furthermore, two projects, namely 57 Promenade and The Stature Jakarta, were completed in the first half of 2023.

A total of 306 new serviced apartment units were completed in 2023, originating from three distinct projects. Two of these projects are situated in South Jakarta, namely Ashta Residence and Citadines Gatot Subroto. The third project, The Grand Mansion Menteng, is centrally located in Jakarta.

Rent growth for serviced apartments exceeds the previous year

Even though demand was lower, prices for upper-grade condominiums experienced a slight increase. This price uptick was primarily driven by the newly-launched projects in the market. Meanwhile, construction progress on ongoing projects remained consistent as completed developments garnered heightened interest from potential buyers.

The introduction of new serviced apartments into the market impacted rents, leading to an overall increase of 4.25% y-o-y in average rents per sqm by end-2023.

Note: Jakarta Residential refers to Jakarta's luxury condominium and serviced apartment markets.