Indonesian developers propose mortgage subsidy for middle-income buyers
Himperra wants buyers of homes priced from Rp250 million to Rp500 million to pay mortgage interest of around 7 per cent.
Indonesian housing developers’ association Himperra has proposed government interest subsidies for middle-income homebuyers, with borrowers paying around 7 per cent. Its chairman, Ari Tri Priyono, said the proposal would cover homes costing Rp250 million to Rp500 million under a scheme separate from subsidised housing finance for low-income households.
Ari illustrated the potential impact with a Rp300 million home: monthly mortgage payments could fall from about Rp3 million to Rp2 million. He said a lower interest burden could also encourage people who had not previously planned to buy a home.
According to Ari, the targeted buyers include young people seeking better-quality housing, access to public facilities and locations closer to work. He said commercial mortgage rates were prompting some prospective buyers to reconsider their purchase plans.
Ari also argued that broader financing support could give developers scope to offer more housing choices in relatively strategic locations by allowing them to purchase more expensive land.
He put the cost of prepared land for subsidised housing at around Rp300,000 per square metre. Developers selling homes for Rp300 million to Rp500 million might be able to pay around Rp500,000 to Rp700,000 per square metre in some areas, he said.
