Stagnation remains, and could continue next year
Despite business and economic activities returning to normal, in 2022, we have not seen improvement in the demand side or supply side of apartments in Surabaya. Prices have moved at a slow, steady pace because of slow sales and increasing numbers of secondary units for sale, which puts downward pressure on price growth.
Furthermore, as the central bank increased interest rates by 175 basis points (bps), we believe that mortgage rates will likely increase and this could soften the apartment market in general. Looking ahead, with a relatively pessimistic economic outlook expected to feed through to purchasing power, consumer sentiment could be affected in 2023. Therefore, we encourage developers to continue to implement attractive flexible payment terms to attract potential buyers.
