40-Year Mortgage Becomes an Option for Buying a Home in Jakarta

The high price of land and the increasingly limited supply of landed houses in Jakarta are driving the development of vertical housing directly connected to public transport. One scheme being prepared to widen public access is a Housing Ownership Loan (KPR) with a tenor of up to 40 years and a fixed interest rate of 6% until fully repaid.

The scheme has been prepared by state-owned PT Bank Tabungan Negara (Persero) Tbk for the purchase of Hunian Manggarai, a Transit Oriented Development (TOD) project developed by PT Kereta Api Indonesia (Persero) through KAI Properti.

BTN President Director Nixon L.P. Napitupulu said the long tenor is being offered so that the public has a greater opportunity to buy a home in the city centre with more affordable instalments. “Indeed, our mandate is to manage housing for the people. We are trying a 40-year KPR scheme with 6% interest until fully repaid,” Nixon said in Jakarta on Friday (21/8).

According to Nixon, the interest rate under the scheme will not change until the credit period ends. BTN is also targeting the price of homes in the Manggarai project to remain below Rp600 million. “In the middle of Jakarta, close to transport, we are keeping the price below Rp600 million. It can receive an interest rate subsidy,” he said.

Hunian Manggarai will be built on around 2.2 hectares of land and is planned to provide 3,784 units in eight towers of 24 storeys. A total of 1,276 units will be built in Block G, which consists of three towers. Meanwhile, Block F will have five towers with a total of 2,508 units. The project will also be equipped with around 150 supporting retail units. Residential unit choices range from a 28-square-metre studio type to a 52-square-metre type with three bedrooms.

KAI President Director Bobby Rasyidin said construction of the entire project is targeted to take around 18 months.

Nixon assessed that the housing pattern of urban communities will increasingly shift from landed houses to vertical housing, especially because land prices in the city centre continue to rise. “In Jakarta and big cities, finding a landed house is already difficult and too expensive. So we have to be realistic; like other cities in the world, Jakarta will definitely go upwards,” Nixon said.

According to him, this need is increasingly relevant for people who prioritise transport access and proximity to centres of activity. Housing located around transport nodes is also considered able to reduce dependence on private vehicles because residents have easier access to the rail network and other public transport.

Manggarai itself is a strategic area because it is integrated with the commuter rail travel network and is located in the middle of Jakarta’s urban area.

BTN projects Hunian Manggarai to become a pilot project for the development of affordable vertical housing based on public transport. If the model works, a similar pattern could potentially be applied to other areas located around KAI assets or stations. “In Jabodetabek there are many stations. We will start from railway station areas because it is easier,” Nixon said.

He added that subsequent development could also potentially target areas connected to the LRT or MRT.

This step is one option for overcoming the limited supply of housing land in big cities while bringing people’s residences closer to the mass transport network.

To reach prospective residents with different financial capacities, BTN has prepared two financing channels, namely the Housing Financing Liquidity Facility (FLPP) and non-subsidised KPR. FLPP is intended for low-income communities who meet government requirements. Meanwhile, non-subsidised KPR is prepared for people who do not fall within the criteria for FLPP recipients.

For the non-subsidised scheme, BTN offers a down payment starting from 5% accompanied by a promotional interest rate programme. At the same time, BTN stated that the financing disbursement process will be adjusted to the progress of project development as part of implementing prudential principles and consumer protection.

Minister of Housing and Residential Areas Maruarar Sirait encouraged the pattern of using railway assets for affordable housing to be applied in more locations. According to him, the capacity to distribute FLPP can be used to expand house construction for low-income communities in areas with adequate transport access. “I ask Mr Nixon that we build again in other places, so that railway assets can be developed immediately,” Maruarar said.

Meanwhile, Chairman of the Housing Task Force Hashim Djojohadikusumo reminded that the construction of affordable housing must remain well targeted and not turn into a speculative instrument. “We must be fair: one customer, one interested buyer, one apartment,” he said.

Along with the start of construction, BTN and PT KA Properti Manajemen also signed a Cooperation Agreement for the Hunian Manggarai Programme. The cooperation covers the provision of financing schemes, banking transaction services, joint marketing, and support for financing access for prospective residents.

The development of Hunian Manggarai is part of efforts to find a new model for housing provision in big cities as landed houses become increasingly difficult to reach. By combining vertical housing, long-term financing, and mass transport access, the project will become one of the tests for the concept of affordable TOD-based housing in Jakarta.