Five Things That Trigger Property Prices Always Increase Each Year

By : Ahmad Fadli And Aldi Firhand. A | Sunday, January 07 2018 - 21:19 IWST

Housing Illustration
Housing Illustration

INDUSTRY.co.id - Jakarta - It's no secret that property prices always go up every year (even per three months), even though the economic condition of a country is less stable. This is then one of the reasons investors and speculators to jump into the property business.

Another reason, the profit gained from this business sector is also doubled, from the rise in land prices or capital gains and the rise in rental rates or rental rates.

revealed several causes to consider why property investment is more promising ​​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 Increase of Population

The number of human populations on earth that continue to swell and not accompanied by the expansion of land make property prices continue to rise from year to year. So is the population in big cities in Indonesia.

Inflation and Infrastructure Effects

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.

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 Bank Indonesia (BI) quarter III-2017 primary property pricing, residential property price growth was 3.32% (yoy), higher than 3.17% (yoy) in the preceding quarter.

The increase of construction materials price (32.95%) and the increase of wages of workers (17.69%) is still the main factor causing the increase of residential property prices such as apartment and house tread

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.

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