Developers told to start building houses again

Developers told to start building houses again

JAKARTA (JP): Developers must resume building houses now,
before an anticipated surge in demand, a senior official from the
Ministry of Settlement and Regional Development said on Saturday.

Opening a property exhibition, director general for
Residential Development, Djoko Kirmanto, said many people would
enter the housing market soon because of declining interest rates
and this month's increase in the salaries of government workers.

Indonesia's property sector has barely recovered from the 1997
economic crisis, which saw sales of new houses plunge to as low
as 55,000 sales last year from a high of 220,000 in 1997. The
industry hopes the sales recovering to 90,000 this year.

The Indonesia Prime Property Fair 2000 at the Jakarta
Convention Center involves 46 housing developers with projects in
Greater Jakarta, Depok, Puncak, Sukabumi and Bandung.

Many of the participants are offering discounts of as much as
46 percent to woo buyers attending the fair, which will run
through May 7.

The fair organizer, PT Dalas Pro Adhijaya, hoped the event
would see transactions amounting to Rp 138 billion.

Dalas' president director, Padmiarso M. Widjojo, said, "With
lower interest rates, people are thinking that it would be more
profitable for them to invest in property."

He said now was the right time to buy property, before
building material prices increased.

Djoko said recovery in the housing sector would, through a
multiplier effect, boost development in 140 other related
industries, including cement and roof tiles, which provide for
the lives of many people.

To help the growth of the industry, Djoko said the government
would assist people from low income groups to buy houses through
a subsidized credit scheme.

The housing credit scheme to purchase small and very small
houses offers an annual interest rates of 14 percent compared to
the market rate of 20 percent.

Djoko said the Ministry of Finance has allocated a small
portion of the Rp 1.3 trillion which his ministry proposed to
finance the housing subsidy scheme in the 2000 fiscal year.

"The government is on a tight budget this year and cannot
afford a large subsidy," he said. "But it is aware that the
housing sector is very important to the people and to related
industries." (10)