Millennials Who Enjoy The Co-Living Concept Amid The Sluggish Property Sector

Apartment illustration. (Photo: Unsplash)

JAKARTA - Observers estimate that the property sector is in a sluggish condition. However, there is a concept that is currently popular with millennials, namely the concept of co-living or property rental.

This concept is starting to be favored by millennials as an alternative place to live. So, industry players need to be creative to provide housing, including boarding houses.

Department Head of Research and Consultancy PT Savills Consultants Indonesia Anton Sitorus said that in order to maximize growth in the property sector, it must be supported by the creativity of developers in packaging attractive products, especially regarding prices.

"To be able to grow, the developer must be creative in making products at affordable prices. If it is fulfilled, I believe the market will increase, ”he said.

According to him, one of the concepts currently in vogue is co-living. However, he said, if the co-living concept was offered at a high price, buyers would also be limited. “The co-living market is like any other property. There is a market, as long as the price is right, "he said.

The same thing was conveyed by Executive Director of Indonesia Property Watch (IPW) Ali Tranghanda. According to him, currently property prices are so high that it is difficult to sell them.

"However, there are still investors who buy, with the hope that the price will continue to rise. In fact, the property market, like the economy, has a market cycle, this is often ignored by investors, "he said.

That is why, he said, it is not surprising that today many people prefer to rent rather than buy, especially in big cities.

"The results of our survey were around 47.4 percent chose to live in a boarding house, then 47.1 percent wanted to live in an apartment, while the rest chose to live in a family or relative's residence," he said.

With an average income of Rp. 6 million-Rp. 7 million per month, it means that they can only buy property in installments of Rp. 2 million to Rp. 2.5 million per month or for Rp. 200 million-300 million. With this price range it is difficult for them to find property in Jakarta.

Based on IPW research, currently 39.9 percent of millennials live in boarding houses or apartments with rents below Rp. 2 million per month. Then as much as 38.5 percent rented at a price of Rp. 2-3 million per month and 21.6 percent rented at a price above Rp. 3 million per month.

The size of the boarding house market in big cities is recognized by one of the housing providers, PT Hoppor International. The company, known as the Family Room, says that every year the trend of boarding rent continues to grow.

During its two years of existence, the Family Rooms themselves have 2,041 rooms spread across 75 locations in Jabodetabek and Bandung. "We will continue to see every potential development of the boarding house business. This is to answer market needs, ”said Family Chamber CEO Charles Kwok.

To support this expansion, the Family Room this year will conduct an Initial Public Offering (IPO) on the Indonesia Stock Exchange (IDX). Most of the proceeds from the IPO will be used to add networks in several regions.

In addition to establishing their own boarding house, the Family Room also opens opportunities for asset owners in the form of land or idle property to be used as productive and generate passive income.

"The system is profit sharing, the family room will turn the unproductive land or building into a boarding house or co-living. Later the owner will get a long-term rent of 10 to 25 years," said Charles.