Housing sales estimated to grow 11% next year

The Jakarta Post, Jakarta

After experiencing a slump this year, the country's housing sector will see a 11 percent growth next year with sales expected to increase to 110,400 units from 99,500 this year, a noted property analyst said.

Panangian Simanungkalit, director of the Center for the Study of Indonesian Property (PSPI), said Thursday that his prediction was based on the continued strong purchasing power of middle- class people and expansion in housing loans provided by local banks.

Housing loan interest is expected to decline to 18.5 percent next year, from 19.5 percent at present, he said.

Transaction value of housing sales next year is estimated to reach Rp 5.15 trillion (US$492.8 million), he added.

"The low-cost housing sector will experience the sharpest increase of between 52 percent to 57 percent," he was by Antara as saying.

Next year, state-owned bank BTN, which is specialized in housing loans, alone will provide credits to buy a total of 5,000 "very low-cost" houses, 20,000 "low-cost" houses and 27,600 costlier houses; while private banks will give credits to buy 45,500 low-cost houses, 9,400 mid-type houses and 2,900 luxurious houses, Panangian predicted.

According to Panangian, housing sales declined by 26 percent this year compared to last year due to a decrease in housing loans subsidy from the government and the increase in housing loan interest in the commercial sector.

The sales of very low-cost houses dropped 69 percent, the low- cost houses 53 percent, while non-subsidized low-cost houses recorded between 22 percent to 30 percent growth in sales, he said.

Transaction value of housing sales is estimated to increase eight percent to Rp 3.78 trillion this year from Rp 3.49 trillion last year.