Government lowers low-cost housing prices
Government lowers low-cost housing prices
JAKARTA (JP): The government announced yesterday that it will reduce the prices of low-cost housing in line with its recent decision to bring down cement prices.
State Minister for Public Housing Akbar Tandjung told a press conference that his office has decided to revise a ruling on the increase of low-cost housing prices issued on April 11 to accommodate the changes in cement reference prices.
"In order to sustain the development of low-cost housing, it is considered necessary to revise (the ruling)," he said after meeting with housing developers.
Before the revision, the public housing ministry's ruling divided low-cost houses into "modest" and "very modest" categories, based on the quality of conditions. It also calculated their prices based on the initial 40 percent hike in the reference prices of cement.
The very modest category covers houses of 21, 27 and 36 square meters, while the modest are 18 and 21 square meters.
The government, following harsh criticism for the 40 percent increase, announced on Monday that retail prices of the material should be set 10 percent below the new reference prices.
Yesterday, Akbar announced that the newly revised ruling established the prices of "very modest" houses sizing 21 square meters at Rp 4.9 million (US$ 2.220) each, a Rp 100,000 reduction from the initial price.
The price of 27 square-meter houses is now set at Rp 5.4 million, while the price for 36 square meters is set at Rp 6.9 million.
The old ruling set the price of very modest houses of 21 square meters at Rp 5 million (US$2,260) each, those of 27 square meters at Rp 5.5 million and those of 36 square meters at Rp 7 million.
The revised ruling is retroactive as of April 1, Akbar said.
He also explained that the decision was taken after careful consideration of the newly-reduced cement prices, and consultation with housing developers.
With the newly reduced prices of low-cost houses the developers can still expect a profit margin of around 5 percent, he said.
The initial profit margin for housing developers, based on the unrevised ruling, was estimated at around 5 to 10 percent, he said.
Akbar said he had held a meeting with the Association of Cement Producers, the state-owned developer Perum Perumnas, the private association of Real Estate Indonesia (REI), and the Association of Employees Cooperatives.
Akbar said that cement producers have agreed to guarantee an adequate supply of cement, which is around 1 million tons/year, for the development of low cost houses during the ongoing Five Year Development Plan period.
The type of cement they would provide is "mix-cement" which is of lower quality. The cement producers would set the mix-cement price at Rp 6,500 per 40-kilogram sack.
For the sixth Five Year Development Plan period of 1994-1999 the government has set a construction target of at least 500,000 low-cost houses.
The state-owned developer Perum Perumnas alone is committed to building 250,000 low-cost houses, while private developers grouped in the Indonesian Real Estate Association promised to construct 300,000 units. Cooperatives pledged to build another 60,000 units.
REI chairman Enggartiasto Lukito yesterday said developers would "obey" the government's decision to reduce housing prices but also called on it to provide them with other facilities in compensation.
"We ask the government to safeguard the supply of cement and monitor the prices," Enggartiasto said. "We also ask that the government help us in other matters by easing procedures on land appropriation or for obtaining bank loans." (swe)