Residential Property Prices Gain Decelerated - Bank Sentral Republik Indonesia
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May 25, 2019

The Residential Property Price Survey conducted by Bank Indonesia showed how rising residential property for primary houses prices continued to decelerate in the final quarter of 2018, as confirmed by a 0.35% (qtq) bump in the Residential Property Price Index (RPPI), slowing from 0.42% (qtq) in the previous period. Developers reported that small residential properties were the main drag on rising prices. Furthermore, the survey respondents predicted house prices to rise 0.42% (qtq) in the first quarter of 2019, edged up by hike on construction materials prices and higher wages.

Developers acknowledged an ongoing residential property sales contraction in the fourth quarter of 2018 despite improving from -14.14% (qtq) in the third quarter of 2018 to -5.78% (qtq). The survey pointed increasing property sales to affect the medium houses contrasting the sales contractions for small and large residential properties.

Internal funds have remained the dominant source of residential property development financing. In the fourth quarter of 2018, the average percentage of capital drawn from internal funds increased to 58.02% from 55.73%, while the use of bank loans fell from 33.95% to 31.18%. On the consumer side, 76.73% of consumers favoured housing loan facilities when buying a residential property in the three months to December 2018.

The complete survey result is available in the Primary Residential Property Price Survey on the website of Bank Indonesia.

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