The Jakarta Post

The Jakarta Post
Jakarta

After experiencing a slump this year, the country's housing
sector will see 11 percent growth next year with sales expected
to increase to 110,400 units from 99,500 this year, a noted
property analyst has said.

Panangian Simanungkalit, director of the Center for the Study
of Indonesian Property (PSPI), said on Thursday that his forecast
was based on the continued strength of the purchasing power of
middle-class people and the expansion of housing loans provided
by local banks.

Home loan interest rates are expected to decline to 18.5
percent next year, from 19.5 percent at present, he said.

The value of housing sales was expected to reach Rp 5.15
trillion (US$492.8 million) next year, he added.

"The low-cost housing sector will experience the sharpest
increase, of between 52 and 57 percent," he was quoted by Antara
as saying.

Next year, state-owned bank BTN, which specializes in lending
for housing, will provide loans for the purchase of 5,000 "very
low-cost" houses, 20,000 "low-cost" houses and 27,600 more
expensive houses, while private bank lending will finance the
purchase of 45,500 low-cost houses, 9,400 mid-type houses and
2,900 luxury houses, Panangian predicted.

According to Panangian, housing sales declined by 26 percent
this year compared to last year due to a decrease in housing loan
subsidies from the government and the increase in home loan
interest rates in the commercial sector.

Sales of very low-cost houses dropped by 69 percent and low-
cost houses by 53 percent, while non-subsidized low-cost housing
recorded sales growth of between 22 and 30 percent, he said.

The value of housing sales is expected to increase by eight
percent to Rp 3.78 trillion this year from Rp 3.49 trillion last
year.