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The Price of Land for Housing in Jakarta

Institute of Urban and Regional Development, 316 Wurster Hall, University of California, Berkeley, CA 94720, USA

Michael Leaf

Institute of Urban and Regional Development, 316 Wurster Hall, University of California, Berkeley, CA 94720, USA

In spite of its potential value to governments, detailed information as to how land prices vary spatially within Third World cities is usually lacking. This paper discusses the distribution of land prices in Jakarta using information provided on a neighbourhood basis by experienced real estate brokers. Appraised prices were given for different types of residential plot distinguished by tenure and infrastructural provision. Analysis of the data in Jakarta shows the relative importance of infrastructural provision and tenure (land title) for land prices. Examination of such data over time makes it possible to test whether and where there has been a spiralling of land prices, and in the case of Jakarta it is found that recent price increases have been consistently greater in suburban areas and in informal-sector plots, arising from the massive demand from low-income households for affordable housing. The paper concludes by drawing out policy implications.

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