INDONESIA'S property market struggled through 1992, labouring under the government's foreign loan restrictions which compelled both domestic and foreign banks to allocate 80 per cent of their US dollar lending to export businesses. As a consequence, with the exception of hotel developments, funding for new property ventures was scarce, according to a special report compiled by Jones Lang Wootton/Procon Indah in Jakarta. Overall, economic growth slowed to an estimated 5.8 per cent, down from 6.6 per cent in 1991. But analysts predict a growth recovery to around six per cent in 1993 on the back of lower interest rates and continued non-oil export gains. The most buoyant property market sector was clearly residential development, with strong demand from investors lured by rental levels that reached as high as US$27 per square metre per month, with occupancy levels of over 95 per cent. Some 359 apartment and townhouse units were completed and the proposed supply for 1993 is 632, for 1994, 2,575, and, for 1995, 640. The sale of apartments by strata title, which was successfully launched in March last year, enticed 17 further proposed developments from September onwards. Currently, market prospects remain excellent because of the low number of completed leasings due throughout 1993. The sharp jump expected in 1994 makes a softening almost inevitable, unless current legislation banning foreigners from owning apartments isamended. Developers are urging such a move. The retail sector remained quiet, with few significant movements from retailers who were collectively suffering under the Government's tight monetary policy. Despite the government's current commitment to maintain the exclusion of foreign investment from the retailing sector, Yaohan gained access through a management scheme at The Atrium, and Makro, a major Dutch retailer, also established a foothold througha cash and carry style wholesale superstore. The office market slowed appreciably in the second half of the year, with a mere 70,000 sq m of space coming on stream compared with the record first half total of 246,000 sq m. The record annual total of around 316,000 sq m is not likely to be matched in the next two years. Figures for proposed supply in 1993 only reach 168,000 sq m; for 1994, 156,000 sq m; and, for 1995, 133,000 sq m. The root cause for this slowdown is difficulty in securing development funding. Prime rates were stable at between US$13 and $15 psm per month, excluding service charges, and are predicted to remain about this level for the next six to 12 months despite the projected supply decline. Jakarta's hotel market is expected to see continued expansion, mirroring the country's economic growth. Two key developments were the opening of the Hilton Convention Centre and the successful hosting of the Non-Aligned Movement Conference last September, both of which should raise Jakarta's profile.