It’s no secret that property prices always go up every year (even per three months), even though the economic conditions of a country are less stable. This is then one of the reasons investors and speculators to jump into the property business.
Another reason, the profit gained from the business sector is also doubled, from the rise in land prices or capital gains and increases in the price of use or rent per year.
But amid the optimism of the property market that is expected to reborn next year, it was revealed some of the causes to consider why property investment is more promising ‘cuan’ than other investment units.
Land Supply Never Rises
The need for housing continues to grow from year to year. However, the supply of land on earth is not increasing, even reduced. Therefore, in accordance with the law of supply and demand, the situation makes the increase of needs and property prices from year to year.
The number of human populations on earth that continue to swell and not accompanied by the expansion of land to make property prices continue to rise from year to year. So is the population in big cities in Indonesia.
Inflation and Infrastructure Effects
Quoted Rumah.com, every year there is inflation. Although the percentage varies but affects other sectors such as interest rates, loan credit acceleration, fuel prices, basic commodity prices, property prices are no exception.
In Soreang, Bandung, property prices are also hoisted up due to the presence of new infrastructure. The increase reaches 15-20% per year.
Material Price Rise
Like other price needs, inflation also increases the price of building materials every year.
Starting from the price of sand, cement, bricks, wood, paint, and others. The accumulated rise in the prices of the building’s basic materials has helped to increase property prices every year.
Based on the results of the quarterly property pricing survey, residential property price growth was recorded at 3.32%, higher than 3.17% in the preceding quarter.
The increase of construction material price (32.95%) and the increase of wages of workers (17.69%) is still the main factor causing the rise in residential property prices such as apartments and home sites.
The growth of the middle class
Each country is actively building. The result of the development is the increasing number of middle class. They are characterized in addition to the average have good education, also have a stable income.
If they form a household bond, two married couples, each with stable income. They are the most potential markets for property investment. Such as take advantage of the decline in interest rates and the growth of new properties are becoming more attractive.
The increasing number of middle class like millenial generation, especially in urban area, will certainly increase the property requirement.