Alert! High Interest Rates Make It Harder For People To Buy Houses

Illustration (Photo: Doc. Antara)

JAKARTA – The trend of increasing benchmark interest rates that occurred in several countries brought its own threat to the development of the domestic business sector.

The Minister of Finance (Menkeu) Sri Mulyani said that one of the business lines that were most likely to be affected was the housing or property sector.

"The interest rate that we have to watch out for now tends to rise with high inflation, so it will be increasingly difficult for people to be able to buy or have the ability to buy a house," Sri Mulyani said in the G20 discussion forum titled Securitization Summit 2022 on Wednesday, July 6.

According to the Minister of Finance, if this situation is not managed properly, it is not impossible that the national property business will face continued pressure after being hit by a crisis due to the COVID-19 pandemic.

"This will be one of the things that have implications for the housing sector," he said.

For this reason, continued the Minister of Finance, the government is here to provide solutions through various subsidy programs, such as the Housing Financing Liquidity Facility (FLPP), Interest Difference Subsidy (SSB), and savings-based financing assistance.

"The government certainly focuses on using state finances with the principle of justice by helping those with low incomes so they can get houses," he said.

For information, Bank Indonesia (BI) is still maintaining the lowest benchmark interest rate level of 3.50 percent since 2020 in order to reduce the impact of the economic slowdown due to the pandemic factor.

The signal for an increase in the BI rate has already begun to appear with the inflation rate continuing to increase since the beginning of the year. In fact, in the latest broadcast by the Central Statistics Agency (BPS), it was stated that the inflation rate had reached 4.35 percent on an annual basis (year on year / yoy) last June.

The nick has exceeded the government and BI target, which is aiming for a maximum of 4 percent for this year.