Property: Law of Supply and Demand despite Jakarta’s Flood
By N Mark Castro
Here’s something to help you assess the cost of flood to your property.
Perennial floods have visited Jakarta every year and yet, ironically, the government almost always act surprised every time it happens.
But do house prices dramatically fall in flood areas and if not, why not?
Jakarta has experience major flooding in average once in every 5 years. The last two big floods were in 2002 and 2007.
From survey conducted by Disaster Mitigation Relief Agency (BNBP), it is discovered that the topography of Jakarta is getting lower while the sea level is getting higher. This coupled with high volume of water dumped by the rainy season will create a flood that is higher and stays longer.
And none more so true in the posh section of Kemang.
A casual viewer might well be tempted to ask: “Who would live in a place like this?”
After all, plenty of property purchasers can be put off by a survey that comes back with damp or a bit of subsidence.
And yet, an average property in Kemang can cost you US$ 1,350,000!
Imagine paying for a first-world price in a third-world country.
One might assume that there would be massive falls in property prices after a highly publicized episode of damaging flooding.
But the figures don’t seem to back that up.
And with the continued higher demand for properties in Jakarta, despite the horrendous traffic and horrible flood, prices will continue to climb and government officials will continue to be dumb.
It’s time for the new generation of politicians to step in.