Rupiah Plummets to Rp 17,670: 3 Million Houses Programme Faces Threats
JAKARTA — The weakening of the rupiah exchange rate, which has touched Rp 17,670 per US dollar, is beginning to cause concern in the property sector, specifically regarding the 3 Million Houses Programme.
The General Chairman of the Indonesian Real Estate Association (REI), Joko Suranto, assessed that the surge in the US dollar is exerting significant pressure on labour-intensive manufacturing sectors that still rely on imported raw materials and foreign currency loans.
Speaking at the Ministry of Housing and Residential Areas (PKP) in Jakarta on Monday, Joko noted that this trend represents a negative indicator for the nation’s economic condition. He highlighted that the primary issue arises for manufacturing companies that hold USD-denominated debt or depend on overseas raw materials, as this will create immense pressure.
He warned that if this trend persists for the next three to six months, the situation could become increasingly dangerous. While companies might be able to withstand the volatility for a short period, a prolonged period of depreciation would pose a serious threat.
Joko added that the weakening rupiah will also impact logistics costs and public purchasing power. Such conditions are deemed unfavourable for the absorption of subsidised housing through the Housing Finance Liquidity Facility (FLPP) scheme.
“If the dollar continues to rise or the rupiah weakens, it threatens purchasing power and drives up costs. Both are detrimental to the 3 million houses programme, particularly regarding FLPP absorption,” he said.
However, Joko noted that the luxury housing segment remains relatively unaffected, as high-end consumers possess stronger financial resilience.
He also highlighted the plight of the middle class, who have been facing economic pressure since 2024. According to him, the decline in public purchasing power presents a serious challenge to the property sector. “Previously, people were dipping into their savings; now, there is a tendency to rely on debt, which is dangerous,” Joko concluded.