What Factors Contribute to the Continuous Rise in House Prices?
Annual property price increases have become commonplace. For investors and businesspeople, this presents an opportunity to venture into the property business with the hope of substantial profits. Despite Indonesia’s current economic instability, coupled with rising staple food prices, stagnant wages, and a consumerist lifestyle, this hasn’t prevented house prices from rising consistently each year. So, what factors are making house prices increasingly unaffordable each year? Here are some of them!
Continuously Increasing Demand
Population growth, especially in the Greater Jakarta area, has led to a surge in housing demand. Rapid urbanization has forced many families to seek housing urgently. The growing number of people seeking to settle in a particular location has led to a surge in demand for property. According to economic law, when market demand increases, the price of the commodity offered will also increase.
Limited Land
This high demand for housing is not matched by the availability of land. In large cities, the available land for suitable housing is increasingly limited and must be shared with other uses, such as offices and other public facilities.
Material and Construction Costs
Rising material costs due to limited natural resources and rising labor costs in the construction sector are contributing to the annual increase in home building costs. When these construction costs rise, property developers will adjust the selling price of the home.
Government Policies and Regulations
Government policies and regulations related to the property sector, particularly housing, significantly influence house price increases. These policies range from taxation policies and mortgage interest rates to zoning regulations, which contribute to price increases or decreases. Government subsidies and incentives typically only help to restrain increases and stabilize prices.
Inflation
One significant factor in rising house prices and other prices is inflation. In the property sector, inflation causes price increases directly and indirectly. Everything from raw materials and labor costs to marketing costs for selling the home is affected by inflation each year. Furthermore, inflation also influences mortgage interest rate increases.
Location and Infrastructure Development
Infrastructure development is also a factor in rising house prices. Infrastructure development in strategic areas and suburbs, supporting activities in the city center, has led to rising house prices. While the development of infrastructure and public facilities facilitates access for the public, this convenience has led to a dramatic surge in demand for housing in these areas, leading to soaring prices.
For example, the Sawangan area of Depok, once undervalued as a residential area, has seen the addition of various infrastructure projects, such as the Pamulang Toll Road and the Desari Toll Road (Depok-Antasari) in the Sawangan area, as well as the arrival of The Park Sawangan, which has made the area a more vibrant area. House prices in the Sawangan area have now increased severalfold compared to 10 years ago.
However, if you’re looking for affordable housing with easy access in the Sawangan area of Depok, YUKARI Sawangan is here to meet your needs. You can contact us at 0823-1133-4579 (WhatsApp), visit us via Instagram DM, or visit the official YUKARI Sawangan website here.
