Limited Growth in Home Ownership Loans Amid Sharp Decline in House Sales

Home ownership loans (KPR) remain the primary means for the public to purchase houses in the primary market. Amid slowing property price growth and a decline in house sales at the start of 2026, the majority of consumers continue to rely on bank financing to own homes. Bank Indonesia’s (BI) Residential Property Price Survey (SHPR) for Q1 2026 records that the share of primary house purchases through KPR reached 69.87% of total purchase schemes. This dominance of KPR occurs while the residential property sector still faces pressures. BI notes that the Residential Property Price Index (IHPR) in Q1 2026 grew by 0.62% year-on-year (yoy), lower than the 0.83% yoy growth in Q4 2025. “From the consumer side, the majority of primary market house purchases are conducted through the Home Ownership Loan (KPR) scheme, with a share of 69.87% of total purchase schemes,” BI states in its Q1 2026 SHPR report. Large-type houses grew by 0.50% yoy, down from 0.72% yoy previously, while small-type houses grew by 0.61% yoy, down from 0.76% yoy. In several regions, house prices even experienced contraction. Surabaya recorded a price decline of 0.27% yoy, deeper than the 0.04% yoy contraction in Q4 2025. In contrast, Padang and Balikpapan saw increases in price growth to 1.21% yoy and 1.44% yoy, respectively. BI records that residential property sales in the primary market in Q1 2026 contracted by 25.67% yoy, reversing the 7.83% yoy growth in Q4 2025. The deepest decline occurred in small-type houses, contracting by up to 45.59% yoy after previously growing strongly by 17.32% yoy. Meanwhile, large-type houses still contracted by 8.03% yoy, though improved from the 10.95% yoy contraction in the previous quarter. Medium-type houses, however, grew by 8.28% yoy after previously contracting by 4.84% yoy.