{
    "success": true,
    "data": {
        "id": 1760768,
        "msgid": "bi-rate-and-developers-facing-increased-pressure-1780366844",
        "date": "2026-05-24 05:40:20",
        "title": "BI Rate and Developers Facing Increased Pressure",
        "author": "Muhammad Idris",
        "source": "KOMPAS",
        "tags": "",
        "topic": "Finance",
        "summary": "Bank Indonesia's interest rate hike to 5.25 per cent, combined with ongoing Middle Eastern conflict, is exacerbating pressure on Indonesia's property sector through rising construction costs and reduced consumer purchasing power. The Real Estate Indonesia Association warns that whilst property prices may rise due to elevated building costs, developers cannot immediately pass these costs to buyers given weak demand, with the full impact of the rate decision expected within two to three months.",
        "content": "<p>The ongoing conflict in the Middle East and Bank Indonesia\u2019s decision\nto raise the BI Rate to 5.25 per cent on Wednesday (20 May 2026) is\nexpected to exert additional pressure on the property sector,\nparticularly in terms of construction costs.<\/p>\n<p>Bambang Ekajaya, Vice Chair of the Real Estate Indonesia Association\n(REI), noted that the unabating war in the Middle East could trigger\nsharp increases in construction costs. \u201cIf the Middle East conflict is\nnot resolved, construction costs will rise sharply. When combined with\nrising mortgage interest rates, prospective buyers will certainly hold\nback,\u201d Bambang stated on Sunday (24 May 2026).<\/p>\n<p>According to him, this situation presents increasingly complex\nchallenges for the property industry. Property prices are likely to rise\ndue to increased construction costs, but the public\u2019s purchasing power\nfor housing has not fully recovered. Bambang assessed that developers\ncannot simply raise selling prices amid weak consumer purchasing\npower.<\/p>\n<p>The BI Rate increase is expected to drive higher commercial lending\nrates, including non-subsidised mortgage rates. This situation is likely\nto increase the financial burden on the public, both for prospective\nhomebuyers and those still servicing mortgages.<\/p>\n<p>\u201cThe current situation is indeed difficult on all fronts. The BI Rate\nincrease will certainly drive up commercial interest rates, including\nnon-subsidised mortgage rates. The impact will undoubtedly be burdensome\nfor both prospective buyers and those making mortgage payments,\u201d Bambang\nsaid.<\/p>\n<p>However, Bambang predicted that the impact of the BI Rate increase on\nthe property market will not be immediately felt in the near term. He\nstated that the policy\u2019s effect will likely only be felt within two to\nthree months, whilst the property market currently remains in\nchallenging conditions.<\/p>\n<p>\u201cThe effects will only become apparent in two to three months.\nMeanwhile, the property market remains difficult,\u201d he said.<\/p>\n<p>According to him, the most realistic approach currently is to\ncontinue marketing ongoing projects while monitoring market\ndevelopments. \u201cFor now, the best approach is certainly to wait and see\nwhile continuing to market existing projects,\u201d he concluded.<\/p>",
        "url": "https:\/\/jawawa.id\/newsitem\/bi-rate-and-developers-facing-increased-pressure-1780366844",
        "image": ""
    },
    "sponsor": "Okusi Associates",
    "sponsor_url": "https:\/\/okusiassociates.com"
}