OREANDA-NEWS. Fitch Ratings says in its new report that the aggregate presales for seven major Indonesian property developers tracked for the report rose by 10.4% yoy in 2Q15 to IDR9.3tn as they offered easier payment terms to entice buyers.

The leverage at these seven major property companies rose 33% at end-June 2015 due to these easier payment terms, and also due to a weaker local currency. That is much higher than the leverage level of -3% at end-2012. Fitch expects sector leverage to remain high in the next 12-24 months as these sales incentives are likely to continue.

Fitch expects larger companies with a stronger track record to continue to surpass their peers in presales in the next 12 months, and also expects property demand to remain weak due to economic growth that is at a five-year low, and interest rates that could remain high even as the rupiah slides.

The new report is the first in a series that will provide updates on Indonesia's residential property market, including trends in marketing sales, price changes, various credit metrics, as well as trends in land acquisitions. The report also highlights any policy changes and presents a summary of rating actions.

The full report "Indonesia Property Watch - 2Q15" is available at www.fitchratings.com.