Residential Real estate property Essay Example | Topics and Well Written Essays - 1250 words

Residential Real estate property - Essay Example In the first quarter of 2013, the appreciation of the property was 7% in Jakarta, which the author believes that it will stay the same until the next four years. The property growth of Jakarta is in the bubble right now. He states, â€Å"My financial analysis that is based on discounted cash flow and direct capitalization, I forecast that in the next 4 years the appreciation will stay the same and in the third year, the property value of one condominium will be around $ 482,765 USD - $ 495,363.† If the condominiums investors decide to sell property, they will gain $ 577580.81 USD net sale price. Thus, investors need to sell their condominiums at maximum in the next 3 years.According to the above financial analysis, it is reasonable to take 7% appreciation for the next four years because from a rational perspective, more lower class people will upgrade to middle class. When they receive their pay role for the first time they receive their money, these group of people would want to purchase a place to live, and they would not think for the property value and others’ perspectives on behalf of the property value. Even though the price is going up, the GDP will support it. Thus, from the author’s perspectives, the demand is still high until the third year. However, after the above analysis, the author believes that Jakarta residential real estate price could go down when people start to realize that the price is not worth the property value. There is a high possibility that more people will start to think to live outside Jakarta.