Developers Reveal Why Selling Subsidised Housing Is Increasingly Difficult
The National Association of Housing Developers and Marketers (ASPRUMNAS) has admitted it is facing increasingly heavy challenges in realising the subsidised housing programme. Weakening public purchasing power is making the sale of subsidised homes more difficult, even though Indonesia’s housing backlog remains high.
Muhammad Syawali, General Chairman of the ASPRUMNAS Central Executive Board, explained there are several obstacles to completing the subsidised housing programme. These include challenging economic conditions, high interest rates, customers being hampered by records in the Financial Information Service System (SLIK) managed by the Financial Services Authority (OJK), and increasingly strict mortgage selection processes.
“Yes, there is some truth to that. There are many factors causing difficulties in selling FLPP homes, many are still affected by SLIK. Then, the economic sector is also rather heavy, and bank selection is stricter. This is to keep non-performing loan (NPL) disbursements low,” he said on the sidelines of ASPRUMNAS’s 13th Anniversary and National Working Meeting at the Bidakara Auditorium, Jakarta, on Monday.
Syawali noted that some members of the public are still not aware of the importance of owning a home. Consequently, they remain consumptive, buying products that are not primary needs. “That is the quality of the customer or the community, who firstly, are not yet aware of the need to own a home. Then, they still do not maintain their OJK SLIK records. They still want to be consumptive with other products, perhaps because they smoke, or buy cars and motorbikes,” he said.
Furthermore, Syawali stated that property developers are facing a surge in the price of raw building materials. Although material costs continue to rise, subsidised houses are still sold at normal prices, meaning no adjustment has been made. He added that developers must bear considerable costs to build a single subsidised housing unit, while also having to maintain building quality according to set standards.
“Because we are also required to provide good, quality buildings, a beautiful environment with trees, grass and greenery, good drainage, as well as electricity and water. All of that is related to the costs that must be incurred, road paving, social facilities, and public facilities must be available. It is actually quite tough,” he explained. Despite this, Syawali stressed that his party will continue striving to help the community meet their needs for decent and affordable housing. ASPRUMNAS is also providing education to the public to avoid being consumptive so they can concentrate on saving to buy a home.