Property 'the most hit' by govt policies

JAKARTA (JP): Several monetary policies introduced after the floating of the rupiah in mid-August has hit much of the property sector, the Indonesian Association of Real Estate Developers (REI) has said.

The association's chairman, Edwin Kawilarang, said in a statement Thursday that property development was mostly curtailed by the bank credit limitations imposed by Bank Indonesia, the central bank.

The government's tight monetary policy and high interest rates imposed by the central bank following the floating of the rupiah also burdened the property sector, he said.

"The tight monetary policy, preceded by the hiking of the Bank Indonesia certificate to 30 percent a month, has knocked down real estate," Edwin said.

The property sector, like any other business sector in Indonesia, was also burdened by the weakened rupiah, the high cost of getting government licenses and bureaucracy.

Edwin said his association would hold a national congress and seminar on Nov. 24 and Nov. 25, to discuss ways of getting out of the crisis.

"Through the congress and seminar, REI wants to relay the importance of easing liquidity and lowering bank lending rates to revive the property sector," Edwin said.

He said his association would also call on the government to introduce regulations on long-term financing for property, like secondary mortgage facilities.

"The formation of an employee home savings fund should be materialized soon so that low-paid employees still have access to housing loans despite the tight liquidity policy," Edwin said. (rid)