Bank Indonesia Survey Shows Small Homes Stabilising Primary Sales

Bank Indonesia's second-quarter residential survey shows the primary market improving from a deep contraction, with small and large houses doing more work than the middle segment.

Prices Rose Only Slightly

The primary residential property price index increased 0.69 percent year on year in Q2, only marginally faster than the 0.62 percent increase in Q1. Developers therefore remain in a low-price-growth environment despite the country's long-term housing need.

Sales Contraction Narrowed

Primary residential sales still contracted 2.36 percent year on year, but that was much less severe than the 25.67 percent decline in the previous quarter. Bank Indonesia attributed the improvement to stronger sales of small and large houses, while medium-type homes stayed constrained.

Financing Shapes Absorption

Developers relied mainly on internal funds, while most consumers used KPR mortgages. That creates a market where loan approval, instalment structure, project handover and developer balance sheet are central to demand.

Buyer Checks

Purchasers should verify land certificate status, developer financing, KPR approval probability, handover date, flood exposure, access roads, nearby resale prices and service charges. A small national price increase does not prove every project is fairly priced.

Outlook

Indonesia looks stabilised rather than fully recovered. Affordable small homes and well-located large-house projects should convert better than mid-market launches that cannot match household borrowing capacity.

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