2 Million House Construction Programme Threatened by Rp94.27 Trillion Budget Shortfall

The Ministry of Housing and Residential Areas (PKP) has been allocated a budget ceiling of Rp11.77 trillion for the 2027 fiscal year. This budget is intended to pursue a construction target of 318,000 units.

The Minister of PKP, Maruarar Sirait, also known as Ara, stated that the largest portion of the budget will be directed towards the Housing and Residential Areas Programme. Meanwhile, the allocation for management support is being kept low to minimise overheads.

“The budget ceiling for the Ministry of PKP in 2027, based on a joint letter from the Minister of Finance and the Minister of National Development Planning/Bappenas, is set at Rp11.77 trillion with a target of 318,000 units. This consists of a Management Support Programme of Rp914 billion or 7.77%, and a Housing and Residential Areas Programme of Rp10.85 trillion or 92.23%. Consistent with 2026, we are striving to ensure that management support does not exceed 10%, or even 8%,” Ara said during a meeting with Commission V of the House of Representatives (DPR RI) on Wednesday (2/9/2026).

This amount remains far below the budgetary requirements if the government intends to pursue the target of constructing 2.08 million housing units in 2027. The funding required for that target is estimated to reach Rp104 trillion.

“The budget ceiling is not yet sufficient to meet the budgetary needs for the target of 2.08 million units, which requires Rp104 trillion, resulting in a shortfall of Rp94.273 trillion,” he added.

The budget deficit primarily relates to several housing programmes to be implemented by the government next year, including increased assistance for house construction and repairs for the community, as well as the development of new dwellings.

“The budget shortfall includes increasing the allocation for the BSPS (Direct Assistance for Home Construction) in 2027, the construction of new low-cost flats in 2027, and continuing the construction of post-disaster housing in Sumatra,” he said.

Regarding the implementation of housing programmes in 2026, the Ministry of PKP received an initial budget allocation (DIPA) of Rp10.309 trillion with a target of over 406,000 units. This budget was subsequently increased through an additional budget allocation (ABT) of Rp2.218 trillion for post-disaster handling in Sumatra.

With this addition, the total budget for the Ministry of PKP in 2026 stands at Rp12.527 trillion, with the target increasing to 414,000 units.

As of 1 September 2026, the budget realisation for the Ministry of PKP has only reached Rp3.38 trillion, or 36.64% of the non-ABT ceiling. The government still has time to increase budget absorption by the end of the year.

“Last year, absorption was 96%; we are targeting 97% this year. We ask for your prayers and support,” said Ara.