Indonesia's property business in Jakarta and surrounding areas will see a slowdown next year, due to increase in interest rates, inflation, prices of materials and rental costs, an official was quoted by the Jakarta Post as saying on Wednesday.
"The impacts of the global economic crisis will likely affect the domestic property sector and indications of a slowdown in supply and demand in Jakarta and its surrounding areas that have already been noted since October," said Dini Priadi, head of marketing and communications at PT Procon Indah.
On the supply side, she said, high interest rates, inflation and prices of materials had discouraged developers from continuing their projects.
According to her, Indonesian people's low purchasing power, affected by high interest rates, slower economic growth and high inflation, will hurt the sector on the demand side next year.
Indonesian central bank's interest rate currently stands at 9.5percent, with accumulative inflation already hitting double digits in the first ten months of 2008.
Source: Xinhua
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