How Significant was the Global Financial Crisis to Indonesia’s Public Listed Housing Developers?

Abstract

The tenth year anniversary of the Global Financial Crisis (GFC) provides an opportune moment to reflect on its true devastation on national industries. While many economists regard it as a global watershed, Indonesia was among the isolated few that emerged relatively unscathed. However it would be erroneous to assume that all of its economic sectors enjoyed the same fortune. A study was conducted to determine the most significant economic event for Indonesia’s public listed housing developers in the years leading up to, and after the GFC. Panel data regression analysis was conducted on the financial data of the sampled companies. The analysis shows that the GFC of 2008 was not the most significant event for the study period for housing market players, nor was it the previous year when housing investor confidence was shaken. Instead that accolade goes to the event of 2012.  While public-listed non-financial companies were affected by the Eurozone Crisis that year, a combination of factors resulted in public-listed housing developers enjoying record financial performance. The study underscores the importance of conducting deep sectoral analysis before arriving at any conclusions regarding the impact of external shocks on particular economic sectors.