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Land market control needed

Land prices in Jakarta have increased by more than three times people’s average incomes, an urban planner told the Jakarta Post in February. According to that story, if urban land and housing continued to compete with businesses for building concessions, most Jakarta residents would be forced outside the city, increasing the number of commuters into the central business district each day.

 

Rising prices did not appear to dampen buying in the high-end housing market, however, with condominiums sales in the first half of 2010 jumping by 170 percent year-on-year. With 4,450 units already sold, a housing analyst told the Jakarta Globe that sales as of June had already reached 70 percent of 2009’s entire sales.

 

Demand for industrial property has also grown in 2010, rising to its strongest in the past five years. According to the Globe, new government regulations have attracted foreign investors who have launched new projects that have helped boost demand for industrial estates.

 

The demand for condominiums and industrial property, however, does not offset the problems Jakarta still faces with speculative land acquisition. Conflicting land regulations have complicated the sale of private property – which is often sold at a premium.

 

Analysts helping the Jakarta city administration improve its infrastructure development say the government needs to purchase tracts of land to ensure private developers do not raise prices prohibitively high. But a 2005 presidential decree that says the government must fairly compensate owners for land it takes for public purposes has prevented such acquisitions.

 

Source: www.thejakartaglobe.com