Despite Rupiah Slump, Luxury-Home Developers Say Market Will Stay Resilient

Jakarta — The depreciation of the rupiah against the US dollar is not deemed to have a significant impact on the luxury housing market, according to developers. The luxury consumer segment is said to still have strong financial capacity amid economic pressures and weakened purchasing power.

Joko Suranto, Chairman of the Central Board of the Real Estate Indonesia (REI), said the greatest impact of rupiah weakness is felt by the middle-income sector and by industries that rely on imported raw materials or dollar-denominated loans.

‘What is not affected is the top tier, because they have choice and strong backing,’ Joko told reporters at the Office of the Ministry of Public Works and Housing (PKP) in Jakarta on Monday, 18 May 2026.

He said rupiah weakness is more keenly felt by the middle-income group whose purchasing power has not yet recovered since 2024.

To date, he added, there has been no significant change.

‘We know that in 2024 there was a shift in the middle class of about 10 million. And even now there has been relatively no change,’ he said.

He even assessed that some segments of society are experiencing heavier financial pressures than before.

‘Previously they lived off savings, now there is a tendency to rely on debt, which is dangerous,’ he continued.

In addition to affecting purchasing power, the rupiah’s weakness is also seen as placing pressure on logistics costs and on labour-intensive manufacturing industries that use imported raw materials.

‘If the dollar strengthens further or the rupiah weakens, it will threaten purchasing power. Secondly, it also drives up costs,’ he said.

The condition, according to Joko, could potentially affect the absorption of subsidised housing under the government’s 3 Million Homes programme, particularly through the Housing Finance Liquidity Facility (FLPP) scheme.

‘And that would not be good for the 3 Million Homes programme either, especially for FLPP absorption,’ he concluded.