Slowdown in Real Estate Demand

Following is the forecast by Indonesia Property Watch for the real estate sector in Indonesia:  

"Indonesia Property Watch (IPW) has taken into account the possibility of a decline in demand for real estate by at least 20 per cent in 2014, besides the slowing growth of property prices," said IPW Executive Director Ali Tranghanda. Ali noted that the drop in demand is caused by a variety of factors such as the increase in mortgage interest rates, the slowdown in purchasing power, and the Central Bank's new regulation being implemented in the property financing sector.These issues impact property growth, which is expected to continue to slow down, with growth estimated at 25 per cent in 2014. (Source: Bernama) 

It is worthwhile to note that the growth is still expected to to 25% per annum, though lower than around 35% expected in 2013. Property prices have been increasing at the rate of 50-60% per year and still the rental yields are higher than most of the countries.