Are Apartments the Ideal Millennial Housing in Jakarta?

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In this article, Jakarta Property Institute (JPI) will discuss the results of a survey on millennials' desire to live in vertical housing in Jakarta. Let's explore the views of the capital's millennial generation towards apartments as an ideal choice of millennial housing.

Based on the Jakarta Property Institute (JPI) survey, millennials with an age range of 19-39 years have thought about and even have the desire to buy housing in millennial housing located in the city center of Jakarta, because their daily activities are centered in Jakarta. But in fact, what has so far become the choice of millennial housing is housing in the suburbs because the price is more affordable. It has not yet occurred to millennials that vertical housing in the city center can also be a millennial housing option, due to the unpopularity of vertical housing in Jakarta.

The survey method to find out respondents' views on vertical housing as millennial housing used a questionnaire with 18 questions asked to a total of 300 respondents spread across Jakarta and outside Jakarta (Bodetabek).

This research aims to answer:

Do millennials have the desire to live in an apartment in Jakarta?
If yes, what drives this desire?
If not, what is the background?

Survey Methodology

300 survey respondents (quantitative) and

50 interview informants (qualitative)

Research time

October 2019 - November 2019

Research location

North Jakarta (Pademangan, Sunter, Kelapa Gading, Indak Kapuk Beach. Penjaringan) ,

West Jakarta (Mangga Besar, Jakarta Kota, Gajah Mada, Hayam Wuruk)

South Jakarta (Sudirman, Blok M, Lebak Bulus, Fatmawati, Gatot Subroto, Rasuna Said)

East Jakarta (Buaran, Pondok Kopi, Klender, Jatinegara, Cakung)

What is the profile of millennials who are respondents?

20-25 years old
Not yet/not married
Female
Bachelor Graduate

Financial

84% work as private employees

43% have an income of Rp5m-10m

What do millennial homes look like in Jakarta now?

What are millennials' transportation choices?

from home to work

44% work in Jaksel

especially in the Sudirman office area,

Gatot Subroto, Rasuna Said and Lebak Bulus

37% spend 31-60 minutes from home to office

travel time above 60 minutes is experienced by millennials whose residence is far from the place of work

45% use a combination of online transportation and KRL/MRT

31% use a combination of online transportation and TJ/public bus/city transportation

Another 24% use a combination of KRL/MRT and TJ/public bus/city transportation

almost

50% spend 10-25 thousand on transportation

Desire/desire to live in an apartment in Jakarta

Click here

Willingness to pay in installments

54%

Want to live in an apartment

46%

do not want to live in an apartment

82%

willing to spend

maximum

3 million/month

to pay for an apartment

Four correlations that

make apartments in Jakarta a desirable millennial housing choice

Correlation 1:

Millennials who live outside Jakarta tend to view apartments in Jakarta as the ideal millennial home

56%

of respondents who live outside Jakarta have a greater desire to live in an apartment in Jakarta

compared to

52%

respondents who live in Jakarta

Correlation 2:

Millennials view apartments as the millennial home they want to live in the future

55.5%

respondents living outside Jakarta have a greater desire to live in an apartment in Jakarta

51.5%

respondents who are boarders/renters also have a stronger desire to live in an apartment in Jakarta

Correlation 3:

Travel time >1 hour: millennials view apartments as ideal millennial homes

63%

of respondents with travel time to work >60 minutes have a greater desire to live in an apartment in Jakarta

49%

compared to respondents with a commute time of 0-60 minutes who would like to live in an apartment.

Correlation 4:

The longer the travel time, the greater the transportation cost

54%

would like to choose an apartment as their millennial home

46%

would not choose an apartment as a millennial home

The most important facilities that are taken into consideration in choosing millennial housing are :

Public transportation
Workplace
Health facilities

Who wants to live in an apartment. ..

Viewing apartments as practical millennial housing

"I would prefer to live in an apartment. If you live in a landed house at a certain time, you have to fix this and that, like leaking roof tiles, cracked walls, broken pumps, and so on. If you live in an apartment, you can just ask the manager to find a service provider, so it's simpler."

Choosing a millennial housing location close to the city center

"I have felt that living in an apartment is simple, close to my workplace and hassle-free. If I already live in an apartment, I want it to be in the city center because it would be strange to buy an apartment on the edge of the city."

54%

want to choose an apartment as a millennial home

46%

do not want to choose an apartment as a millennial home

Strongest reason for not wanting to live in an apartment :

Viewing landed houses, such as those available in cheap clusters in Jakarta, as more ideal millennial homes.
The high rent/mortgage price of an apartment makes it a less than ideal choice as a millennial home

Who doesn't want to live in an apartment.. .

Ownership status

"If the status of a landed house is SHM, what we want to do is also free with an unlimited period of time. And I understand that if you live in an apartment, you have to renew the certificate."

Space factor

"I prefer a house because the price of apartments is already high in the middle of the city, whereas if you live in a house that is not in the center, you can get something bigger."

Conclusion

Who wants to live in an apartment

Apartments are considered ideal millennial homes if the maximum installment of the unit is 3 million / month
Workplace location, transportation costs and travel time are related to the desire to choose an apartment as millennial housing in Jakarta.
Proven by facilities that are important to millennials: public transportation, workplace and health facilities
From personal experience: practical and close to the city center are the reasons for the attractiveness of apartments as millennial housing

Who does not want to live in an apartment

The strongest reason is:
1. Viewing landed houses as a more ideal millennial home
2. The rental/installment price to buy an apartment is expensive compared to landed houses such as available in cheap clusters in Jakarta
From personal experience: ownership status and size of living space are reasons for not wanting to live in an apartment

Recommendations for the Government

Extend Building Rights Title

30 years 99 years

The current Hak Guna Bangunan (HGB) in Indonesia is 30 years. Then residents can apply for a 20-year extension to the State Land Agency. This makes residents feel that they do not have certainty of residence ownership, or the same as renting. This factor certainly also affects millennials' views on vertical housing as an ideal choice of millennial housing.

Whereas in other countries, such as Singapore, HGB can be up to 99 years, so apartment owners have a sense of security when buying an apartment because of the long usage period. This will further attract residents to live in vertical housing because the ownership status is not much different from landed houses. The long usage period also makes apartments an attractive asset for investment, just like when buying residential in the form of landed houses in cheap clusters in Jakarta.

Provide cheap apartments in the center of Jakarta

because most millennials can only afford a maximum installment of Rp. 3 million per month.

How to realize cheap vertical housing? The government can build with construction costs from developer obligations on public land that is used less optimally and sometimes even abandoned, such as many lands owned by BUMD (markets, offices and other buildings) and BUMN.

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