Subsidised Home Sales Plunge, Minister Ara Reveals Licensing Hurdles

Jakarta, CNBC Indonesia - Minister of Housing and Settlement Areas (PKP) Maruarar Sirait has responded to the decline in subsidised home sales during the first half of 2026, a matter previously lamented by property developers. He acknowledged that various challenges persist in the programme’s implementation, but the government remains optimistic that this year’s subsidised housing distribution target can still be achieved. “We certainly face challenges, such as licensing issues and so forth. However, Minister Nusron (ATR/BPN Minister) and the Home Affairs Minister have helped expedite matters. I remain optimistic, as next week alone we will inaugurate 62,000 units, and in December, 71,000 units,” Maruarar stated at the National Economic Council (DEN) office on Thursday (25/7/2026). He added, “Challenges will always exist, but we must work hard to find solutions and support one another. It is impossible to have no challenges, and I apologise if there are still many shortcomings we need to address in the future.” This statement follows data showing that subsidised home sales in the first semester weakened compared to the same period last year. Amid this slowdown, the government views resolving on-the-ground obstacles as key to boosting subsidised home distribution in the second half of the year. Responding to developers’ proposal to raise subsidised home prices by up to 15% due to soaring material costs, Maruarar said the government is waiting for a formal submission from the association before making a decision. “I have asked the chairpersons to meet with me to officially convey their suggestions and aspirations. I am still waiting for that,” he said. To date, the government has not decided whether subsidised home prices will be adjusted. The Ministry of PKP is choosing to review all inputs from business players before determining the next steps. “Let’s just wait and see, we will study it. I have asked them for quite some time to meet with me,” he said. The realisation of subsidised home sales throughout the first half of 2026 reached 91,531 units, a 24.3% drop from the 120,976 units recorded in the same period last year. According to the Indonesian Housing Developers Association (APERSI), the decline was triggered by a combination of licensing obstacles, rising material costs, land limitations due to the Protected Rice Field (LSD) policy, weakening public purchasing power, and credit approval processes hampered by the Financial Information Service System (SLIK). Business players also assess that the slowdown became more pronounced entering the second quarter through to the end of the first semester, prompting the developers’ association to propose a price adjustment for subsidised homes to maintain the economic viability of projects amid rising construction costs.