Middle East Conflict Threatens Housing Sector to Slump
Jakarta — The intensification of the conflict between Iran and the United States and Israel is expected to exert additional pressure on the global economy, including Indonesia’s housing sector in 2026.
Martin Daniel Siyaranamual, head of the Economic Research Division at PT Sarana Multigriya Finansial (Persero) or SMF, said 2026 would not be an easy period for the housing sector.
“In truth, 2026 is not a year of roses for the housing sector. The implications are well understood; SMF must work harder and more effectively in order to fulfil its mandate,” Martin said at a press conference in Jakarta on Wednesday, 4 March 2026.
He noted that the global economic growth projection for 2026 shows a slowdown, although developing countries generally still perform better than advanced economies.
In the Indonesian context, economic growth is projected to remain around five percent.
However, Martin believed that growth stability at that level is not enough to lift Indonesia out of the middle-income country category.
“The question is not merely how stable Indonesia’s economic growth is, but whether the five per cent figure can propel Indonesia up a rung. That underpins why the government seeks to push growth to six to eight per cent,” he said.
He explained that the challenge of reaching that growth target becomes more difficult amid rising geopolitical tensions, including the conflict in the Middle East.
That region is known as one of the world’s energy production hubs. Iran itself is a major exporter of natural gas, a key substitute for oil.
Martin projected that the conflict could push up global oil prices.
Global oil prices have already approached the $90–$92 per barrel range and could break through to $100–$120 per barrel.
“The implications are clear: the easiest to observe is an increase in energy subsidy burdens,” he said.
An increase in energy subsidies could constrain the government’s fiscal capacity as development programmes must continue.
That situation would raise questions about budget priorities, including for the housing sector.