BI: Residential Property Sales Plunge 25.67% in Q1 2026

JAKARTA - Bank Indonesia (BI) has recorded a sharp decline in residential property sales in the primary market during the first quarter of 2026, particularly for small-type houses.

BI’s Residential Property Price Survey (SHPR) results show that residential property sales in Q1 2026 contracted by 25.67% year-on-year (yoy), following 7.83% growth in Q4 2025.

“Residential property sales in the primary market experienced a year-on-year decline in the first quarter of 2026,” BI stated in its Q1 2026 SHPR report.

“Residential property sales growth contracted by 25.67% (yoy), from previous growth of 7.83% (yoy) in Q4 2025,” the report continued.

The decline was mainly influenced by small-type house sales, which contracted by 45.59% (yoy), after previously growing by 17.32%.

Meanwhile, large-type house sales still contracted by 8.03% (yoy), though not as deeply as the previous quarter’s 10.95%.

On the other hand, medium-type house sales grew by 8.28% (yoy), an improvement from the previous quarter’s 4.84% contraction.

The decline was mainly caused by large-type house sales contracting by 20.38% quarter-on-quarter (qtq), from previously high growth of 31.97%.

Additionally, medium-type house sales also contracted by 10.72% (qtq), after previously growing by 8.59%.

Small-type house sales contracted more deeply to 14.68% (qtq), compared to -7.43% in Q4 2025.

BI noted that the main challenges in developing and selling residential properties include a 20.97% rise in building material prices, permitting or bureaucratic issues at 18.15%, and mortgage interest rates at 16.47%.

Additionally, the high proportion of down payments in mortgage applications reached 12.16%, and taxation factors accounted for 11.28%, also posing market barriers.

Nevertheless, mortgage interest rates remained stable at 7.42% compared to Q4 2025.

President Prabowo Subianto has targeted the construction of 1 million homes for workers and labourers near industrial zones.

“We have already built quite a few this year, up to 350,000 homes, but our target is at least 1 million homes,” Prabowo said during the May Day commemoration at Monas on Friday (1/5/2026).

Prabowo stated that these homes will be built near workplaces to reduce transportation and rental costs for workers.

Additionally, the government is preparing monthly instalment subsidies of Rp 600,000 under the 3 million homes programme.