Jakarta, CNBC Indonesia – The house is one of the primary needs that must be fulfilled. But even though the status is primary needs, how come it feels even more difficult to own a house …
The main factor that prevents someone from owning a home is cost. Getting here, the price of houses or other housing continues to rise.
Quoting the Residential Property Price Survey released by Bank Indonesia (BI), the residential property price index in the second quarter of 2020 was 1.59% year-on-year/ YoY. This is indeed the lowest since at least 2012, but it is still showing an increase.
For most Indonesians, it is impossible to buy housing with cash. Therefore, the Home Ownership Credit (KPR) facility is the main source of financing.
In the second quarter of 2020, 78.41% of consumers used the KPR facility to buy housing. Only 16.22% bought with cash gradually and 5.37% were really cash.
NahWhat is the problem is that the mortgage interest is goddamn high. As of August 2020, the Financial Services Authority (OJK) recorded that the average mortgage interest rate (KPR) was 8.5% per year.
Indeed, mortgage interest has fallen compared to the position at the end of 2019. However, the decline was relatively small, only 18 basis points (bps).
The 8.5% figure also needs to be given context to describe how it impacts on daily life. For example, someone buys a house for Rp. 500 million. Assuming a fixed interest rate (flat) 8.5% for 20 years, the total mortgage debt that must be paid reaches IDR 1,041,387,880. This means that interest is more expensive than the price of the house!
In addition, KPR interest in Indonesia is also the highest among neighboring countries. In Singapore, the average 15-year interest rate at the 10 largest banks is 2.84% per annum. Then in Thailand, the KPR interest rate at the Government Housing Bank for retail consumers is 6.15%.
CNBC INDONESIA RESEARCH TEAM
(aji / aji)
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