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The average price of condominiums in prime Jakarta locations grew in the first quarter this year due to a shortage of units, industry reports showed.

“The positive economic outlook, strong rupiah and a relatively low interest rate are the main drivers of strong demand,” said Herully Suherman, head associate director at property consulting firm Procon Indah.

Utami Prastiana, the head of research at Procon, said the availability of land in Jakarta kept decreasing while demand for condominiums kept growing. That led developers to consider areas outside the central business district.

The CBD is among the busiest areas in Jakarta, encompassing main roads such as Jalan Sudirman, Jalan Thamrin, Jalan Gatot Subroto and Jalan Prof. Dr. Satrio. Prime areas are neighborhoods inhabited by high-income earners, such as Menteng, Kebayoran Baru, Senayan, Pondok Indah, Permata Hijau and Kemang.

According to Procon, the average price of condominiums across the capital in the first quarter rose 3.2 percent to Rp 12.9 million ($1,500) per square meter.

Consumer demand, which is measured through the market absorption rate from the available units, grew steadily in the first quarter. Procon said the market absorbed 97.2 percent of the supplied condominiums, 0.2 percent higher than the fourth quarter of 2010.

Despite strong consumer demand, Jakarta saw a lower net condo purchases due to the limited supply coming online. The net take-up was 648 units purchased in the first quarter of 2011, down sharply from 2,800 units in the last quarter of 2010. The total supply of condominiums in Jakarta grew less than 1 percent to 76,281 units in the first quarter.

In a separate report, real estate consultantcy firm Cushman & Wakefield said condominium development in Jakarta’s more established residential areas was expected to continue.

“This development may attract more investors than end-users, especially with demand for leased units such as hospitals, expatriate communities, universities, working neighborhoods or the central business district area,” the report said.

Cushman & Wakefield said the average condominium price in the CBD was Rp 17.45 million per square meter, up 4.2 percent from the previous quarter. The average price in prime areas was Rp 16.71 million per square meter, up 3.9 percent from the last three months of 2010.

Budi Gozali, director of St. Moritz, a unit of the country’s largest integrated property developer, Lippo Group, said infrastructure development in Jakarta was key to property sector growth. The Jakarta Globe is affiliated with the Lippo Group.

He said St. Moritz’s project, which integrates residential, shopping mall, hotel, office, school and other facilities has seen strong demand. The project’s proximity to the Jakarta Outer Ring Road, which connects West Jakarta to Soekarno-Hatta International Airport, also boosted its appeal, he added.