Subsidised Home Sales Plunge as Developers Propose Rp20 Million Incentive per Unit
Jakarta, CNBC Indonesia – Weak sales of subsidised homes have prompted developers to propose a change in how government funding is used. The Association of People’s Housing and Settlement Developers (Himperra) has proposed considering the transfer of funding for 100,000 units under the Self-Help Housing Stimulus Assistance (BSPS), or Home Renovation programme, to the Housing Financing Liquidity Facility (FLPP).
The proposal comes as FLPP disbursements remain well below the annual target. As of 9 October 2026, financing for subsidised homes had been provided for just 177,161 units, against a target of 350,000. The government therefore still needs to finance around 172,839 units by the end of the year.
Himperra chairman Ari Tri Priyono said the main problem affecting subsidised-home sales was the weak purchasing power of low-income households (MBR). Government support should therefore be directed towards helping prospective buyers obtain homes at more affordable prices.
“Frankly, subsidised-home sales have fallen sharply this year because the purchasing power of low-income households has weakened. The government needs to show greater support,” Ari told CNBC Indonesia on Monday (12 October 2026).
Himperra has proposed a government incentive of Rp20 million for each subsidised home. The assistance is expected to reduce the selling price and ease the burden on people buying their first home.
The assistance would not be a discount that developers have to fund. The proposed scheme is government support to strengthen people’s ability to buy homes, particularly for low-income groups still struggling to raise a deposit and meet instalment payments.
“The incentive we are proposing is not a price reduction funded by developers, but government support to strengthen people’s ability to buy homes. The Rp20 million per-unit assistance is expected to bring down the price of subsidised homes and ease the burden on prospective buyers,” Ari said.
The additional incentive is expected to help increase take-up under the FLPP, which has a target of 350,000 units in 2026. However, redirecting BSPS funding still requires further discussion, including the budget rules, implementation mechanism and whether the assistance will reach the intended beneficiaries.
“Subsidised-home sales have fallen sharply this year because the purchasing power of low-income households has weakened. The government needs to provide greater support so that people who need homes can afford to buy them,” Ari said.
Alongside financing, developers have raised concerns about licensing processes that they say are still holding back housing construction in several regions. Ari cited licensing in West Java, which he said remained stalled without a decision from the regional government.
Himperra has proposed bringing housing permits under a more integrated process led by the Ministry of Housing and Settlement Areas. Ari said certainty over permits was needed for developers to prepare land and carry out projects, while prospective buyers needed straightforward access to financing.
“The key point is that developers need certainty to build, while prospective buyers need support to access financing easily and quickly,” Ari said.
Subsidised-home prices have already risen. In 2026, the price in Java, except for certain areas, and in Sumatra is Rp166 million.