Land Permit Issues and Material Costs Hinder Supply of Subsidised Housing
Jakarta, CNBC Indonesia - The Public Housing Savings Management Agency (BP Tapera) has confirmed that public demand for subsidised housing remains high. However, the biggest challenges currently lie on the supply side, ranging from rising building material prices to land permit issues.
BP Tapera Commissioner Heru Pudyo Nugroho stated that the relaxation of debtor credit history rules issued by the Financial Services Authority (OJK) has meant the demand side faces relatively few obstacles. According to him, developers in various regions also see that the need for subsidised housing remains substantial.
“On the demand side, there are actually no problems. Moreover, there is now a relaxation effort by the Minister in cooperation with the OJK Chairman, so that credit records with a remaining debit balance below Rp1 million no longer hinder the mortgage application process for debtors,” Heru said during a BP Tapera press conference on Friday (24/7/2026).
Nevertheless, he acknowledged that challenges have now shifted to the supply side. Prices of several building materials have started to rise, impacting the construction costs of subsidised housing. This condition is a concern for the government as it could affect developers’ ability to provide houses at the stipulated prices.
“On the supply side, there are challenges. The price of materials such as cement in various regions has started to increase, along with spandek, bondek, ceramics, and iron. This is what the Minister has asked us to study together with BPS,” Heru said.
In addition to rising material prices, land permit issues remain a task to be resolved. The government, Heru noted, has coordinated with the Ministry of Agrarian Affairs and Spatial Planning/National Land Agency (ATR/BPN) and the Ministry of Home Affairs to accelerate the resolution of various obstacles related to the Sustainable Food Agricultural Land (LP2B) policy.
“Land and permit issues have been addressed with extraordinary effort by the Minister through collaboration with the Minister of ATR/BPN and the Minister of Home Affairs. A joint circular has been issued providing relaxation so that permit obstacles can be resolved immediately,” he explained.
These various policies are beginning to show results, with the distribution of Housing Financing Liquidity Facility (FLPP) funds increasing again in recent weeks. BP Tapera claims to be providing assistance to developers and distributing banks to resolve various technical obstacles in the field.
“The realisation trend continues to increase. This shows that policy interventions on both the demand and supply sides are starting to run effectively. We are optimistic that FLPP distribution this year will improve, especially with the additional financing scheme for subsidised flats,” Heru concluded.