The Phenomenon Of Haunted Apartments Rises During The COVID-19 Pandemic: Empty And Prices Drop

JAKARTA - Jakarta is a city with a large number of apartment buildings, especially in strategic areas adjacent to offices. Generally, the tenants of vertical housing are workers from outside the city or expatriates.

However, due to the impact of the COVID-19 pandemic which has been running for almost two years, there are almost no apartment tenants. This has resulted in the phenomenon of the term 'ghost apartment' aka minimally populated apartments in the capital city.

The phenomenon of haunted apartments or rented apartments that are mostly uninhabited occurred during the COVID-19 pandemic. Director of PT Jababeka Tbk Suteja S. Darmono said the current condition of the apartment market really needs attention.

"There are rumors that ghost apartments are back again. We want to fight this synergy. I emphasize that this apartment needs attention," he said in the Rumah.com Panel Discussion - Directions for Market View and Property Trends 2022, Thursday 10 February 2022.

According to him, this haunted apartment trend will not go away even though it is currently experiencing a trend shift to landed houses

The property sector during the COVID-19 pandemic continues to experience corrections, both in terms of unit growth and prices. Property company, Knight Frank, revealed that the price of residential properties such as condominiums and apartment rentals continues to be corrected. There are 9,818 residential units such as condominiums in the central business district (CBD) that have not been sold.

"Cumulatively, it will join new supplies that will be present this year and the next 3 years," said Knight Frank Indonesia's Senior Research Advisor, Syarifah Syaukat at a press conference, Thursday 10 February 2022.

Research Proves Occupancy Drops

Based on research from Colliers Property, apartment occupancy decreased until the third quarter yesterday, the occupancy position was only at 51 percent or below last year's average of 60 percent.

Historically, the average apartment occupancy in Jakarta through the Cushman & Wakefield survey was at the level of 45%. This equates to more than half of the apartment building being empty without occupants. The serviced apartment occupancy rate is currently the lowest in the last five years. On the other hand, serviced apartments also experienced a decline in the occupancy rate during January-September 2021, which was to the level of 51.7 percent. Until the end of the year, serviced apartment absorption is predicted to be minimal due to the limited arrival of expatriates.

Quoted from CNBC Indonesia, Friday, February 11, 2022, Codwell Banker Commercial Senior Manager, Angra Angreni said this was due to the missing rental market from the expatriate market.

Meanwhile, what happened from privately owned apartments that were also rented out, there was a decrease in the occupancy rate. So far, 60%-70% of buyers of strata title apartments are investors who expect rental income, especially from the office worker and student segments.

"This strata title rental target is missing, or very limited, also competing with serviced apartments. It is said to have disappeared because of student work from home (WFH) also online. So it's not surprising that the occupancy rate for strata title apartments in Jakarta is still below 60%,"

The developer's strategy to fill this ghost apartment is by strengthening socialization and marketing. In addition, the ghost apartment market is expected to recover in line with the improving conditions for COVID-19.