Property Developers Suddenly Request Increase in Subsidised House Prices, Here's Why

The rising cost of building materials is once again putting pressure on subsidised housing developers. Industry figures have indicated that construction costs have increased sharply.

“The increase in raw material prices has reached 15%,” said Deddy Indrasetiawan of the All-Indonesia Housing and Settlement Developers Association (Apersi), as quoted on Thursday (23/7/2026).

The rise in raw material costs has significantly increased the financial burden on businesses. Deddy proposed that the selling price of subsidised houses needs to be adjusted immediately and has conveyed this to the government. A price adjustment is necessary to ensure that subsidised housing projects remain commercially viable amidst soaring production costs.

“Our calculation at Apersi is that it should increase by 12 to 15%,” Deddy said.

The proposal comes after developers calculated the rise in construction costs over recent months. The cost pressure does not stem from a single material but is also influenced by distribution and supply issues in various regions.

Various materials have experienced price spikes for different reasons. In addition to the impact of global conditions, limited domestic distribution of materials has also added to the cost of building subsidised houses.

“The highest increases vary; steel went up during the war, ceramics are hard to get, hebel (lightweight bricks) we have to buy with cash, and for natural materials, there is competition between West Java and Banten,” he said.

Distribution obstacles for materials persist due to transport restrictions in several areas. This situation forces developers to use smaller vehicles, which increases logistics costs and ultimately burdens the overall cost of building subsidised houses.

“There is no moratorium yet. It has been relaxed little by little, but only small vehicles are allowed. With small vehicles, transport costs automatically go up, that is the situation,” Deddy concluded.