The property prices on the island could hike by 10 percent in 2015 due to fluctuation in fuel prices in the market, according to a forecast by Bank Indonesia (BI) for Bali region.
“It is estimated that the market outlook for properties (primarily home) is still good, in line with the estimated increase of about 5 to 10 percent in prices,” Head of BI Bali Dewi Setyowati stated here on Sunday.
She explained that these predictions are influenced by several government policies that positively support businesses and employment.
The several policies earlier revised were the fuel prices policy along with the subsidy policy and the provincial minimum wage (UMP) that increased slightly by 5.09 percent, from Rp1,524,872 to Rp1,621,172.
The central bank had previously conducted a survey on business members of the Indonesian Real Estate Association (REI) and the Indonesian Real Estate and Broker Association (AREBI).
The survey revealed that the business condition is relatively favorable and has forecast it to remain positive in 2015.
According to her, the favorable condition would be consistent with the high level of demand, especially for type 36 to type 70 categories of houses.
“The indicator is the consumer’s demand for properties less than Rp1 billion,” Setyowati pointed out.
Prospective areas considered for development with the selling price hovering around Rp1 billion are Tabanan District, Negara District, Klungkung District, Bangli District, and the eastern region of Karangasem District.
Some developers expanded their businesses in the East Nusa Tenggara Province, such as in the Kupang Municipality and Tambolaka City in Southwest Sumba District.
Setyowati revealed that properties, with nominal prices above Rp1 billion, are used for investment and rent back.
“The developers then become more selective in selling or marketing their properties,” she added.
Bank Indonesia of Bali office also noted that the realization of the credit for the construction of housing in Bali during the 2014 is slowing down.
Dewi Setyowati explained that lending to the construction sector, particularly housing construction slowed from 55.19 percent to 48.40 percent.
BI Bali noted in general the credit growth slowed during 2014 compared with the previous year. Annual credit growth slowed from 25.67 percent to 16.73 percent in November 2013 until November 2014.