Prices are relatively cheap, property investment in Indonesia is still passionate

ILLUSTRATION. housing construction in Depok, Monday (03/05). Depok is still a target area for many house seekers.

Reporter: Ridwan Nanda Mulyana | Editor: Yudho Winarto

KONTAN.CO.ID – JAKARTA. The results of the Residential Property Price Survey (SHPR) of Bank Indonesia indicate that residential property sales increased in the first quarter of 2021 with a growth of 13.95% (YoY). On the other hand, the Residential Property Price Index (IHPR) Quarter I-2021 indicates limited growth of 1.35% (YoY).

General Chairperson of Real Estate Indonesia (REI) Paulus Totok Lusida assessed that the survey results adequately reflect the reality of the property market. This result is not much different from the REI calculation which recorded a sales growth of around 15% in the first quarter of 2021 compared to the fourth quarter of 2020.

“The (sales) of many properties are priced at around Rp. 1 billion and below, it takes almost 90 percent of the market share,” said Totok when contacted by Kontan.co.id, Sunday (30/5).

He did not deny that the growth in property sales at the beginning of this year was supported by a number of incentives disbursed by the government. In particular, the relaxation of the Value Added Tax (VAT) borne by the government.

To maintain this growth momentum, REI also hopes that the housing handover period as a condition for VAT incentives can be extended from August to December 2021.

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“The growth is quite encouraging because there is a relaxation of VAT. So we expect it to be carried out until December,” said Totok.

With the government-borne VAT incentive, Totok ensures that the residential price paid by consumers (end user) will be cheaper.

The limited price increase as depicted in the survey is still quite reasonable in line with the soaring number of building raw materials such as iron and steel.