Indonesian Residents Still Rely on Mortgages to Own Homes
Bank Indonesia records that the majority of the population still buys homes using Home Ownership Credit (KPR) in the first quarter of 2026. Amid a slowdown in property prices, home sales have instead fallen significantly on an annual basis.
Based on the Residential Property Price Survey (SHPR) results, the portion of primary home purchases through KPR reached 69.87% of the total purchase schemes. Meanwhile, purchases with instalment cash amounted to 19.61% and full cash 10.53%.
“From the consumer side, the majority of primary market home purchases are conducted through the Home Ownership Credit (KPR) scheme, with a share of 69.87% of the total purchase schemes,” states the Bank Indonesia report, as quoted on Monday, 11 May 2026.
Meanwhile, from the developers’ perspective, property project financing is still dominated by the company’s internal funds. The share of financing from own funds reaches 80.66% of the total residential property development needs. The remainder comes from bank loans at 13.74% and consumer payments at 5.60%.
On the price side, growth in residential property in the primary market was recorded as slowing. The Residential Property Price Index (IHPR) in the first quarter of 2026 grew 0.62% year-on-year (yoy), lower than the 0.83% yoy in the fourth quarter of 2025.
The slowdown occurred across all house types. Prices for small-type houses grew 0.61% yoy, medium-type houses 0.88% yoy, and large-type houses 0.50% yoy.
By region, out of 18 surveyed cities, 10 cities experienced a slowdown in house price growth and three cities saw annual price declines. Surabaya was one of the cities with the deepest price contraction, namely minus 0.27% yoy.
On the other hand, Padang and Balikpapan recorded higher house price growth compared to the previous quarter.
Not only prices slowing, but home sales also dropped sharply. Bank Indonesia recorded that primary market residential property sales contracted by 25.67% (yoy), after growing 7.83% (yoy) in the fourth quarter of 2025.
The largest decline occurred in small-type houses, which plummeted 45.59% yoy. Meanwhile, sales of large-type houses still contracted 8.03% yoy. Only medium-type houses continued to grow by 8.28% yoy.