Bank Indonesia Believes The Property Sector In 2020 Is Better

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JAKARTA - Bank Indonesia (BI) predicts that the outlook for property demand in Indonesia in 2020 will be better because economic conditions are getting better and a number of policies have been issued.

"We are optimistic that the property sector will get better in 2020," said Widi Agustin, director of the BI Macroprudential Policy Department in Jakarta, Thursday, February 6.

Widi said that BI had issued a number of policies such as relaxation of loan-to-value (LTV) averaging 5 to 10 percent, then reducing the BI 7 days repo rate or 7DRR to five percent.

In addition, BI has also lowered the statutory reserve requirement or reserve requirement for conventional and sharia commercial banks by 50 basis points. With the policies that have been issued, BI hopes to also be reflected in bank lending rates.

BI also estimates that credit growth in 2020 will increase by 10 to 12 percent, and third party funds that can be collected by banks will grow by 8 to 10 percent.

The prospect of higher economic growth in 2020 is also expected to increase domestic demand and increase foreign capital inflows.

"This means that the bank's ammunition is getting bigger to provide credit, so the ammunition has been, the provisions have been relaxed, the economic conditions are also expected to improve, so now it is up to the industry to respond. We see that demand for this property is still good," said Widi Agustin.

Previously, property consultant Colliers International stated that property buyers and business players in countries in the Asian region, including Indonesia, are starting to show optimism to invest in this sector this year.

According to Colliers Asia Managing Director of Capital Markets and Investment Services Terence Tang, cautious optimism in the property sector is partly due to the easing of tensions due to the trade war between the United States and China, the continuing downward trend in interest rates in the Asian region.

In addition, he said, countries in the Asian region were also considered to have long-term growth prospects and strong economic fundamentals.

Colliers International also noted that the property sector in Indonesia can continue to get attention from both local and foreign developers, including the construction of landed houses and cluster development, especially for retail and industry.