SBM x JPI: How to spark the economic recovery from property sector

Photo illustration by Tolu Olebode on Unsplash

“Unquestionably, property sector is a potential to spark the economic recovery after Covid-19,” said Adjunct Associate Professor SBM ITB, Dr. Aries Firman, in a webinar held by the Jakarta Property Institute (JPI) and SBM ITB titled “Industri Properti: Pemantik Kebangkitan Ekonomi” on Thursday (07/09/2020).

According to Aries, property and construction had backward and forward linkages to other sectors such as manufactures and services. “These linkages will create a multiplier effect ­as an accelerator to bolster the sinking economy. The pandemic has urged the property and construction sectors to review all processes that need continuous improvements from both internal and external factors,” said the expert.

Discussing the significant role of the sector, Executive Director of Jakarta Property Institute (JPI), Wendy Haryanto showed data that the property sector absorbed the workforce in Jakarta by 425 thousand people in 2018. She said, “The construction and real estate industry contributed to the economy of DKI Jakarta by 17.61 percent while the investment went to 23.9 percent or equivalent to Rp 14.8 trillion in 2019. The value of foreign investment from the two industries was 28.3 percent or equivalent to Rp 17.5 trillion.”

Furthermore, Wendy pointed out the first step to ignite the economy. “After the PSBB status has been lifted, the government can start to provide flexibilities to developers who are ready to build for the next 3 years,” told Wendy. She underlined Jakarta’s policy to increase building intensity written in provincial regulation No. 1/2014. “For developers, to increase the intensity means more business. As to the government, this policy will drive the economy and generate regional tax,” she said in the 2-hour webinar.

Senior Advisor on Strategy and Transactions for Ernst & Young, Bernardus Djonoputro put his emphasis on the pandemic disruption on three major issues. He began with pandemic emergency control, preparedness for global economic downturn and stimulus package.

“Property and construction business with their linkages are vital to drive the economy. However, the corona pandemic has changed our lifestyle and expectations. Inevitably, the pattern of this business will also change following today’s global trends,” Bernie said.