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Rising cement prices could cause a slowdown in the Indonesian property market

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World Cement,

Indonesia’s property sector may see slower annual growth and increased prices as cement manufacturers plan to raise prices due to rising costs of raw materials. As reported by The Jakarta Post, Ali Tranghanda, Executive Director of Indonesia Property Watch (IPW), anticipated that property prices could increase by some 15%. Furthermore, annual growth of the sector could fall to around 25% in 2014, from 30% in 2013. Tranghanda stated that new construction and housing projects would be the most affected.

The current slowdown in the cement industry is due to an increase in prices and a saturated market. As a result, many cement companies are planning to raise retail prices. PT Semen Indonesia is looking to increase its prices by around 2% – 3% in 2014 in order to tackle inflation in the country and PT Semen Baturaja is set to raise retail prices by around 2% to cope with rising costs.

A rise in prices is anticipated across the country’s various heavy industries in 2014 and inflation is predicted to be in the range of 7% – 7.5%. Eddy Hussy, Chairman of Real Estate Indonesia (REI), said that he was still optimistic about property and housing growth in the country as although there will be some impacts, the rise in the retail price of cement is relatively low.

Edited from various sources by Rosalie Starling

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