Gen-Z Wants a House in the City Centre: Just a Dream or Reality?

Jakarta, CNBC Indonesia - Indonesia’s young people, particularly Generation Z, are finding it increasingly difficult to meet their basic need for housing. This is driven by rising land and house prices, while wages remain stagnant.

The Center of Economic and Law Studies (CELIOS) indicates in its report on Indonesia’s Economic Inequality 2026 that the influence of super-rich individuals is contributing to the surge in property prices.

CELIOS notes that land, the main component of house prices, is largely controlled by a small elite with access to permits, concessions, and substantial capital.

“This ownership is often not matched by proportional taxes, leading to land hoarding and speculation that pushes property prices up much faster than the income of young people,” states CELIOS.

As a result, the issue is not just an inability to buy a house, but restricted access to land, while property prices continue to rise. Consequently, young people are forced to live farther from economic centres and bear higher living costs.

For illustration, the price of a new house in Jakarta ranges above Rp1 billion. Assuming a Home Ownership Credit (KPR) programme with a 10% down payment and tiered interest rates, the monthly instalment could reach Rp7 million.

This means that to afford such a house, young people would need a minimum income of around Rp20 million. For those earning Jakarta’s minimum wage, buying a house in Jakarta—the country’s economic hub—is out of reach.

Even opting for houses in Jakarta’s satellite cities like Bekasi, Tangerang, South Tangerang, and Depok, prices remain relatively high at Rp400 million to Rp1 billion depending on size. Under similar conditions, workers would need to pay around Rp2 million monthly at flat interest rates and about Rp4 million when entering floating rates.

Thus, young people need a minimum income of Rp8-10 million to be in an ideal position to own a house in satellite cities.

Opportunities for young people to buy affordable housing are increasingly marginalised. Access to homeownership is limited in city centres and their satellites.

Moreover, according to CELIOS, subsidised houses priced at Rp166-185 million (1-5% down payment, around 5% interest) are still beyond Gen Z’s reach: instalments absorb 31-35% of the monthly minimum wage, and up to about 48% of a Rp2.2 million salary (case study), making homeownership feel nearly impossible.

Even buying cheaper houses comes with consequences like long distances between home and economic activity centres, requiring extra money for transport, extra time, and extra energy.

Journeys from home to work or job sites, which could take minutes if living in the economic centre, now take hours on the road. Transport costs are also higher, further eroding personal finances.

Property prices continue to be driven upwards, far exceeding the earning capacity of young people. Meanwhile, most Gen Z salaries are around the minimum wage level, with “karjimut” status or meagre pay for employees.

“Housing is a basic need on par with food and health, as well as a key to accessing education, employment, and life stability. For young people, homeownership also means independence, readiness for family, asset accumulation, and even a ‘social safety net’ amid weak protection systems,” adds CELIOS.