Bank Indonesia Brings Bad News: The Property Market Is Predicted To Be Low, Prices Fall By The End Of The Year

Illustration (Photo: Doc. Antara)

JAKARTA - Bank Indonesia (BI) reports that the national property market has yet to find a steady growth momentum after the COVID-19 pandemic. This can be seen from the results of the Residential Property Price Survey (SHPR) conducted some time ago.

Head of the BI Communications Department, Erwin Haryono, said residential property prices grew limited in the third quarter of 2021 which was reflected in the increase in the Residential Property Price Index (IHPR) of 1.41 percent on an annual basis (year-on-year/YoY).

"The lift was slightly lower than the growth in the previous quarter of 1.49 percent YoY", he said as reported by the official website on Friday, November 12.

According to Erwin, the central bank projects that the housing industry will face the same situation until the close of next year.

"In the fourth quarter of 2021, the price of primarily residential property is estimated to still grow limited at 1.19 percent YoY", he said.

Erwin said the fall in the selling price of housing was in line with the number of occupancy developers had successfully released to the market. It was revealed that the survey results indicated that residential property sales in the primary market in the third quarter of 2021 were still on hold.

"Sales of residential properties in the third quarter of 2021 contracted 15.19 percent YoY. The decline in residential property sales mainly occurred in the type of small houses", he said.

Furthermore, based on sources of financing, survey results show that developers still rely on financing from non-banking sources for residential property development.

To note, in the third trimester of this year 65.87 percent of the total capital requirement for housing project development comes from internal funds.

"Meanwhile, from the consumer side, banking financing with mortgage facilities is still the main choice for consumers in purchasing residential property with a share reaching 75.38 percent of total financing", Erwin concluded.