Nataconnexindo.com,
Tangerang – Real estate, and the property market is among one of the most
influential supporters of the national economy. Amidst stagnation due to the coronavirus pandemic, the national economy has plummeted for three quarters in
a row. It rises dismay among officials and businesses across the countries.
However, the real estate and property market showed endurance and grants hope
for national economic growth in late 2020.
International Monetary
Fund (IMF) predicted that the real estate and construction sector will tip with
4,5% growth. Therefore, the Indonesian government struggled to preserve this
sector positive movement. The officials believe the real estate and property
sector will stir all the 170 subsectors to surge.
The endurance showed by
real estate and property sectors against recessions have been reflected on
paper. The report says the year-on-year price index grows 2,3% and the supply
index significantly grows 46%. It indicates that both suppliers and consumers
of property confidence are still intact despite the menacing recession.
Assistant Deputy
for Housing, Land, and Infrastructure Financing, The Coordinating Ministry for
The Economy, Bastary Pandji Indra says that the shifting from offline to
online, the adaptation to new normal in retail and warehousing, and the flexibility of work from home for white-collar worker makes this sector
function outstandingly among the other sector.
Bastary also says that
the government stimulus rolls out as a lever to surge all the affected sectors
including the real estate and property sector. The biggest question is, then,
what makes this sector endure the economic impact of the coronavirus pandemic?
Offline to
Online Shifting
The situation created
from Social Restriction Policy is the limitation to public access and physical
contact. The situation has proven to harm the business relying on physical
contact and social relationship. The real estate hinged at the social
relationship to deliver information to the prospect so that they would choose
and buy their property. Home visits, events such as an open house, and a marketing
gallery rely on this kind of relationship. During social restriction, this kind
of public gathering is banned and people are afraid to contact the coronavirus
when they attend any public events. The developer needs to approach people
differently. Some choose to shift from offline and physical meetings to online
meetings. This makes up the trend for the past five months and the success of
this shifting bear fruit at the end of the second quarter.
Online shifting is also
encouraged by people's preference for online entertainment. Indihome and
FirstMedia noted that consumption patterns had significantly changed during
social restriction. Online time spending spiked to 14 percent. Work from Home
policy also contributed to this spike. The time people spend on social media
change from 8 hours to 12 hours. The property developer sees this as an
opportunity to reach their potential consumer. The home visit is replaced by
Virtual Reality, the open house events are replaced by webinar, and the
marketing activity is replaced by digital marketing. The online shifting is
believed as one of the other factors that make the property and real estate
industry on labor a significant success.
Government
Stimulus
Past five weeks, the
Central Bank of Indonesia role out loan relaxation policy by lowering the interest
rate cap to 4%, the lowest in history. This will hopefully reinforce the
purchasing power for people who want to own a house or property. On the other
hand, loan relaxation is also stipulated for other mortgage payments such as an
automotive loan. The cash transfer (BLT) to encourage purchasing power is also
implanted to ensure the middle- and lower-class consumption unaffected by
income loss.
The stimulus gains
firmer influence over time reflected by a slower rate in household transaction
loss for the past five weeks. Center of Reform for Economic (CORE) reported
that household consumption is expected to grow negative 41,1 percent but in
fact, it is only cited negative -39,6 percent year on year. The purchasing power
is necessary to keep money circulation healthy. The implications of the policy
will eventually reach the property market for these quarters and are expected
to push economic growth to at least not negative. (ADR).