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)