If you’re in your 20s or early 30s and still don’t own the roof above your head, then by all means, be worried, as it’s likely that many of you won’t be able to do so anytime in the near future.
That bleak prediction was made by property website Rumah123.com, who recently released the latest findings from a long-running survey. According to their data, by 2020, only 5% of millennials in Jakarta will be able to buy their own homes due to the huge disparity between rising property prices and the average income.
In their survey, which was carried out with careers website Karir.com, they found that the average price for the cheapest houses in Jakarta could rise by 125% over five years starting from 2016. During that same period, the average salary increase in the city would only be about 80%.
It gets even more grim from there. Only 17% of millennials in the capital currently earn more than IDR7.5 million (US$555) per month. With that salary, Rumah123 said that one would only be able to realistically take out a mortgage on a house valued at IDR300 million (US$22,200), which amounts to only 1% of all houses in Jakarta (located in the outskirts of the city, no less). In five year’s time, that same house would be valued at IDR750 million (US$ 55,500), making it virtually unattainable by even more millennials when their yearly salary increases lag behind the increases in property values.
On Rumah123, houses currently valued at around IDR300 million in the Greater Jakarta Area are mostly one bedroom/one bathroom houses measuring around 35 meters squared. There are hotel suites larger than that.
But, according to Rumah123 Country General Manager Ignatius Untung, it’s not all the economy’s fault. Ignatius said many millennials don’t make owning property a priority in their lives, instead spending their money on the latest smartphones and traveling.
“Traveling can be postponed because ticket prices don’t increase by much. Whereas house prices increase by a lot, even by 100% in a year. If (owning a house) is not made a priority, then they’ll never own a house,” he said, as quoted by Detik yesterday.
The Jakarta administration believes Governor Anies Baswedan’s DP Rp 0 (zero down payment) subsidy program could be the solution for property ownership for millennials in the capital. The program is targeted at citizens who earn less than IDR7 million per month and requires the government to pay for the house’s down payment and interest throughout the mortgage.
The problem with the program is that, while it’s one of the cornerstones of Anies’ election campaign, it could be nothing but an empty promise as he and his administration don’t even seem to know specifically where to build the houses, other than saying that they will be built somewhere in the Pondok Kelapa subdistrict in East Jakarta (to which the subdistrict chief said she was unaware of any houses being built for the program in the area).
When pressed about it yesterday, Vice Governor Sandiaga Uno playfully told reporters that he’s holding a competition for people to guess the houses’ location.
