BI Notes IHPR In Bali Grows 1.48 Percent

BALI - The Bali Province Bank Indonesia Representative Office noted that in the first quarter of 2024, the Residential Property Price Index (IHPR) in the local province grew by 1.48 percent (yoy) compared to the same period the previous year.

Head of Bank Indonesia Representative for Bali Province Erwin Soeriadimadja said the growth of the IHPR in Bali Province was seen based on the results of the Bank Indonesia Residential Property Price Survey (SHPR).

"Based on the results of the survey, it indicates that the price of residential property (properties used as housing or housing) in the primary market or when the house was traded for the first time has increased," Erwin said as quoted by ANTARA, Sunday, June 2.

SHPR, continued Erwin, is a quarterly survey of a sample of housing project developers (developer) in Bali Province.

He added that the increase in residential property prices was reflected in the development of the Residential Property Price Index (IHPR) in the first quarter of 2024, growing by 1.48 percent (yoy) compared to the same period the previous year. "This increase is higher than the growth in the previous quarter which was recorded at 0.43 percent (yoy)," he said again.

The increase in the IHPR in the reporting period was mainly driven by an increase in prices on three types of properties, namely small (building area of less than 36 square meters) which increased by 1.77 percent (yoy).

Then the medium type of house (building area between 36-70 square meters) increased 2.13 percent (yoy) and the large type of house (building area above 70 square meters) which increased by 1.07 percent (yoy).

The increase was higher than the previous quarter, which increased by 0.90 percent (yoy), 0.19 percent (yoy) and 0.33 percent (yoy), respectively.

"The increase in residential property prices in the first quarter of 2024 is estimated to be influenced by the increase in the price of building materials," said Erwin.

In addition, the increase in residential property prices was also influenced by an increase in home sales in the primary market during the first quarter of 2024, which was still growing by 14 percent (yoy) mainly supported by small and large house-type sales, although it was slowing down compared to the previous quarter which grew 21 percent (yoy).

Erwin added, although residential property sales continue to grow, there are a number of main factors that hinder the development and sale of primary residential property in Bali, including building price increases (23.62 percent), licensing problems (14.91 percent) and mortgage interest rates (13.48 percent) and high down payment proportions in KPR submissions (10.89 percent).

In addition, SHPR also shows that the financing for residential property development in Bali is sourced from banking funds of 45 percent, developer internal funds of 43.75 percent and the rest from consumer funds.

"Meanwhile, from the consumer side, the financing scheme in the purchase of primary housing mostly uses Home Ownership Loans (KPR) with a share of 76.92 percent of total sales," he said again.