Govt vows to ensure credit for low cost houses

Govt vows to ensure credit for low cost houses

JAKARTA (JP): The government yesterday gave assurances that bank credits for the construction of low cost houses will continue to flow next year despite threats of a possible credit crunch in the property sector.

State Minister of Public Housing Akbar Tandjung told reporters yesterday that the government has requested all the banks to give priority to financing low and medium-cost houses.

"There should be no difficulties in getting loans for the construction of low to medium-cost houses in the coming year," Akbar said during a media briefing to review the outgoing 1995.

He predicted continued strong demand for low and medium cost houses in 1996.

Akbar however could not give similar assurances for the upper end of the property market, noting that the recent rush to build luxury apartments and houses may have brought the market to a saturation point.

Many observers have also warned that Jakarta is facing a glut in luxury apartments and houses when dozens of new projects are completed in the next few years.

Akbar said many banks are likely to tighten their credits for the construction of luxury property.

"It depends completely on the banks, whether they are willing to finance the apartments, condominiums or luxury houses projects. Before making their investments in certain projects, they have to consider the risks," he said.

The minister yesterday also promised to tighten the government's control over the sales of houses and apartments in view of the growing complaint by property buyers about developers failing to deliver what they promised.

Lured by aggressive advertising, many people have been duped into buying property that did not exist nor will exist. There were also complaints about houses that were not built in accordance to the terms agreed at the time developers signed the contract.

"Next year, the government will impose stricter controls on developers, to make sure that they don't cheat consumers and take advantage of them," Akbar said.

"I am optimistic that the number of cases will decrease next year," he said, referring to the 132 cases this year that were dealt with by the Real Estate Indonesia (REI), the association of housing developers.

Akbar said his office will open a post office box to deal with public complaints on housing problems, on the first of January.

PO Box 5002 will also accept questions and information about housing matters from the public.

"The public can ask anything about housing matters and they can file complaints if they feel they have been cheated by developers," Akbar said.

Most of the complaints in the past had been addressed to REI.

This year, Akbar's office received complaints about six developers from consumers. The six in question are PT Badra Putra, PT Griya Jaya, PT Griya Lestari, PT Kala Sutra, PT Mayang Sempurna and PT Tiga Putro.

Yesterday's media conference was held at Akbar's office and was attended by REI chairman Edwin Kawilarang Perum Perumnas president, Srijono, and deputy chairman of state-owned Bank Tabungan Negara, Pandamsih. (31)