Indonesia's property price rises slowing
Indonesia’s property market is now slowing, despite robust economic growth, helped by market-cooling measures imposed by the authorities. True, Indonesia’s residential property price index (14 major cities) rose by 7.88% during the year to end-Q2 2014, but this is a significant slowdown on 12.11% year-on-year price increases during the same period last year (all figures from Bank Indonesia). Look at it this way: when adjusted for inflation property prices rose during the past year by just 1.19%.
Nominal property price figures can be particularly misleading in Indonesia, because inflation has been high, and remains high. Residential property has been attractive to rich Indonesians and others partly as a protection against inflation.
