The Small House Trend is an Option

Head of Research at Rumah123, Marisa Jaya, stated that the highest median price growth for houses with an area of ​​less than 60 square meters is found in Bandung, which grew by 34.1% with a median price of IDR 590 million per unit. Meanwhile, houses with an area range of 60-90 square meters experienced the highest price growth in Denpasar, which reached 38.2%, with a median price of IDR 1.3 billion per unit.

A significant growth in the prices of houses with sizes below 60 square meters has also occurred in West Jakarta, with a 25 percent increase with an average price of Rp 1.25 billion per unit. In Medan, there was a rise of 17.5 percent with a current median price of Rp 470 million per unit. Bekasi saw a growth of 15 percent with a current median price of Rp 575 million per unit, and Tangerang rose 12.9 percent with a median price of Rp 789 million per unit.

Also read: When the Middle Class Wants Cheap Housing

In addition, the prices of houses sized under 60 square meters have also increased in Bogor by 11.1 percent with an average price of Rp 500 million per unit, Surakarta grew by 9.3 percent with a median price of Rp 470 million per unit, and South Jakarta went up by 7.3 percent with the current median price of Rp 750 million per unit.

Marisa added that the significant increase in the price of small-sized houses with an area of below 60 square meters and a range of 60-90 square meters is suspected to be due to several factors, including high demand, especially in strategic urban areas, supported by facilities and public services that make it easy to access workplaces, shopping centers, schools, and transportation.

In addition, small-sized houses have a more affordable price and maintenance costs. Younger generation consumers consider the potential increase in living expenses, especially in urban areas, thereby urging them to find ways to maintain budget efficiency. Houses with smaller sizes tend to be more affordable in terms of purchase, maintenance, and utilities, which can help reduce financial burdens for their owners.

"For some consumers, price remains an important factor in choosing a house. "Even though they are looking for a house that fits their budget, they also expect a small house with added value and good quality," said Marisa in a written statement, Friday (29/3/2024).

From a functionality standpoint, according to Marisa, consumers prefer homes that are highly functional and efficient in space utilization. They have an interest in house designs that maximize every available space, such as intelligent storage and multi-purpose spaces. In terms of design, consumers are interested in modern home designs with a simple appearance.

"The dynamics of lifestyle have also driven consumer preferences towards small, practical homes. This is demonstrated by maximizing every space in a unique way," he said.

Also read: Indonesia's Middle Class Spends Wages on Cars and Houses

Meanwhile, houses with sizes ranging from 60-90 square meters also experienced a significant increase in Bogor by 11.8 percent with the current average price of Rp 950 million per unit, Medan increased by 10.1 percent with a median price of Rp 738 million per unit, Bandung grew by 7.5 percent with a median price of Rp 1 billion per unit, and Central Jakarta rose by 7.3 percent with a median price of Rp 1.39 billion per unit.

In South Jakarta, houses ranging from 60-90 square meters also saw a price increase of 4.8 percent with a current median price of Rp 1.45 billion per unit, Bekasi rose by 4.3 percent with a median price of Rp 939 million per unit, and Tangerang grew by 3.8 percent with an average current price of Rp 1.35 billion per unit.

On the other hand, the median price growth of houses with a size range of 91-250 square meters increased by 15.4-22.1 percent. The highest growth was found in Central Jakarta and Medan, with median prices ranging from Rp 1.8 billion to Rp 5.5 billion per unit.

Balance

Marisa added that demand for housing in Bogor continues to increase and is most popular in the Jabodetabek area. Bogor is considered attractive for property investors to achieve long-term profits due to high interest in residential projects developed by a number of leading developers.

The demand for housing in Bogor is also influenced by the preferences of the community for affordable housing, a more lush environment with easy access to the city center. "This makes Bogor an ideal choice for those looking for a balance between urban living and natural beauty," said Marisa.

In the last three months, the most sought-after residential properties in Bogor are in the price range of Rp 400 million to Rp 1 billion (33.74 percent), followed by properties worth Rp 1 billion to Rp 3 billion (26.79 percent), and properties below Rp 400 million (26.56 percent). The most popular areas in Bogor are Babakan Madang (14.97 percent), Cibinong (9.11 percent), Cileungsi (5.46 percent), Gunung Putri (5.27 percent), and Bojonggede (4.18 percent).

Also read: Home Flexibility for the Middle Class

In areas outside of Jabodetabek, four cities on Java Island experienced the highest annual price increases, namely Semarang (3.3 percent), Surabaya (2.8 percent), Surakarta (2.7 percent), and Bandung (1.1 percent). Housing in Semarang has the potential to grow due to the large tourism sector with direct access to Surakarta and Yogyakarta.

Urban planning observer from Trisakti University's Regional and City Planning department, Yayat Supriatna, separately stated that the younger generation or Gen Z is increasingly moving further away from the city center. However, they are increasingly seeking assurance of the speed of mass transportation services to the city center. This is reflected, among other things, in the largest number of commuter train passengers who disembark at Dukuh Atas Station in Jakarta's central business district and Lebak Bulus Station.

The younger generation is targeting houses on the outskirts of the city because they are more affordable. In order to buy a house with a bank loan scheme, the amount of monthly loan installments is generally equivalent to 30 percent of their monthly income.

"They (the younger generation) rely on transportation by commuter trains. The profile of commuter train passengers is currently dominated by those aged 20-30 with a monthly income ranging from Rp 8 million to Rp 10 million. They are looking for affordable housing that matches their income," said Yayat last week.

Vice Chairman of Community Empowerment and Development of Indonesian Transportation Society (MTI) Center, Djoko Setijowarno, added that middle-class spending is not only for clothing, food, and shelter, but has shifted to the purchase of private vehicles such as cars and motorcycles due to the limited public transportation services in residential areas.

In the Greater Jakarta area, there are 2,010 housing complexes. The middle-class housing complexes are recorded in 268 locations, while the lower-class complexes are in 1,584 locations.

"To reduce the high cost of transportation, it is time to increase the provision of subsidized public transportation for middle to lower class residential areas, such as Trans Pakuan in Bogor and Trans Patriot in Bekasi," said Djoko.

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