Developers Say Subsidised Flats at Rp 14 Million Per Square Metre Are Not Viable
JAKARTA - The Jakarta Regional Board of Real Estate Indonesia (DPD REI DKI Jakarta) assesses that the increase in the upper limit for selling prices of subsidised flats in Jakarta will not necessarily boost developers’ interest in constructing people’s vertical housing.
According to the Chairman of DPD REI DKI Jakarta, Arvin F Iskandar, the high price of land and the limited market absorption are still seen as the main obstacles for subsidised apartment projects in the capital.
Therefore, Ministerial Decree (Kepmen) on Housing and Settlement Areas (PKP) Number 23 of 2026, which regulates the selling price limit for subsidised flats at Rp 13.5 million-Rp 14.5 million per square metre, does not automatically make projects viable from a business perspective.
“If developers have to buy land from scratch while the unit selling price is capped, not all locations in Jakarta will be feasible from a business standpoint,” Arvin explained at a business forum in Lampung on Thursday (7/5/2026).
In addition to land schemes, REI DKI Jakarta is also requesting relaxations in the building floor coefficient (KLB) for people’s housing projects built on government land to make vertical development more optimal.
From a fiscal perspective, REI DKI Jakarta is pushing for tax relaxations in the housing sector, particularly the Acquisition Duty on Land and Buildings (BPHTB), which is still considered quite high for the public.
“If possible, BPHTB could be waived. At minimum, the rate should be lowered to match the PPh, which is already 2.5 percent,” he said.
Arvin acknowledges that the non-FLPP housing market for middle-income people is still facing heavy pressure due to weak purchasing power and limited financing.
According to him, challenges also come from the low approval rate for Apartment Ownership Credit (KPA) from the banking sector.
“KPA approvals are currently only around 20-30 percent. Even many banks are not financing apartments, even though the units built are ready stock and ready to be occupied,” he said.
Therefore, REI DKI Jakarta is requesting support from regulators and the banking industry to expand public financing access, including the implementation of fixed KPA interest rates of 6 percent for up to 30 years.
REI DKI Jakarta also hopes for policy relaxations for prospective consumers with collectibility status two so they still have a chance to obtain KPR or KPA facilities. With the condition that the developer is also ready to buy back if the credit becomes delinquent.