Fitch: Indonesian Property Presales Fell Sharply in 3Q15
The aggregate leverage of these seven major developers had also worsened to 35.5% by end-3Q15, compared with a marginal net cash position (leverage was -3.6%) at end-2012 during the height of the property boom. Fitch expects sector leverage to remain high in the next 12 months as sales and cash collections will lag construction, especially for developers with more high-rise projects in the pipeline.
Residential property price growth also continued to slow for the eighth consecutive quarter, up 5.5% yoy in 3Q15. Fitch expects prices to remain muted in the next 12 months - given the weak demand, underpinned by weak commodity prices and higher inflation in 2015 that has led to tepid economy growth.
The full report "Indonesia Property Watch - 3Q15" is available at www.fitchratings.com.