Developers ask for hike in low-cost house prices
Developers ask for hike in low-cost house prices
JAKARTA (JP): The government will consider private developers' demand that the price of low-cost houses be raised, but will not grant an increase if it is satisfied that the developers can still make a profit, according to State Minister for Public Housing Akbar Tandjung.
"Many private developers have urged me to raise the sale price of low-cost houses and we will discuss their demand next month," Tandjung told reporters during a break in a hearing with Commission V of the House of Representatives yesterday.
He said that developers have complained about the rising prices of land and construction materials which, they claimed, were reducing their profits.
"But first I will study their profit margins; whether they really have dropped," he said.
Tandjung said that developers were spending more on license fees and infrastructures construction.
He refused to disclose the extent of the price rise sought by the developers.
Low-cost houses currently cost between Rp 4.5 million and Rp 11.9 million (US$2,091-$5,409) each.
The state-owned Bank Tabungan Negara has recently announced plans to lower interest rates on its loans for the purchase of low-cost houses from its current level of 16 percent per annum in order to encourage developers to build more such houses.
The growth of the construction of low-cost houses has been slower than the growth of demand.
For the sixth Five Year Development Plan (Repelita VI) period, 1994-1999, the government has set a construction target of at least 500,000 low-cost houses, of which 200,000 should be constructed by private developers grouped in the Indonesia Real Estate Association, 250,000 by the state-owned developer Perum Perumnas and 50,000 by cooperatives.
The minister, who declined to reveal how many units have been constructed in the first year of the plan, said yesterday that 100,000 low-cost houses should be constructed each year within the Repelita VI period.
Under a joint decree signed by Ministers of Public Housing, Home Affairs and Public Works, private developers are required to apply a 1:3:6 housing scheme, meaning that they should build six low-cost houses and three medium-cost ones for each luxury house they build. (icn)