Property Developer Boss Reveals Impact of the US-Israel–Iran War on House Prices

Jakarta, CNBC Indonesia - The geopolitical conflict in the Middle East, which has spurred higher commodity prices and a weaker rupiah, is not yet seen to exert heavy pressure on the domestic property sector.

Joko Suranto, Chairman of the Real Estate Indonesia (REI) DPP, says the main impact of the global conflict on the property sector stems more from higher logistics costs due to rising energy prices.

‘If the initial impact is definitely related to fuels. When that happens, it means higher logistics costs,’ Joko told CNBC Indonesia on Friday, 6 March 2026.

Nevertheless, he estimates that the increase in logistics costs remains within a range that developers can manage. ‘When we talk about logistics costs, I think the increase will not be up to 10%,’ he said.

According to Joko, the impact of the logistics cost increase on house prices is not too large because the transport component only affects a small portion of total construction costs.

He explained that physical construction costs typically account for around 35% of the total price of a house. With an assumption of a 10% increase in logistics costs, the impact on house prices would be about 3.5%.

‘If we calculate from the selling price costs, for example one house is 35% of the building. That means what goes up is 35% times 10%, so let’s put it at 35% plus 3.5%,’ he clarified.

In addition, the Indonesian building materials industry is regarded as robust, so dependence on imports is relatively small.

Many building material factories such as cement, ceramics and construction components have spread across various regions developing as new property areas.

‘We still have abundant natural resources in terms of materials. That also remains relatively supportive of this growth,’ said Joko.

With these conditions, REI assesses that the national property sector still has fairly strong resilience in facing external volatility.

‘As long as the fluctuations are not extremely exponential, we can still manage the risk; the increases are still manageable,’ he concluded.