The Alarming Impact of Rising US Dollar on Indonesia's Housing Sector

Jakarta, CNBC Indonesia - Property developers have spoken out on the impact of the unstoppable rise of the US dollar on the housing sector. Real Estate Indonesia (REI) Chairman Joko Suranto stated that the increase in the US dollar or the rupiah’s depreciation could affect the housing industry, though the effects may not be felt for three to six months. ‘The negative impact is clear. If it stays within certain limits, they might hold for three to six months, but after that it could become quite dangerous,’ Joko said on Monday (1/6/2026). He added that the most significant impact would be on labour-intensive manufacturing industries with US dollar-denominated loans or imported raw materials, which in turn affects the housing sector and its supporting industries, including building materials. ‘The issue arises when these manufacturing companies have US dollar loans or import materials, creating pressure,’ Joko explained. Joko noted that the people’s housing sector, including subsidised homes, would be most affected, while luxury housing would see less impact due to its resilient segment. ‘Commercial housing could be impacted, but the top-end luxury homes are not affected because they have options and high support. The middle class, however, have no choice,’ he added. Meanwhile, National Housing Developers Alliance (Appernas) Chairman Andriliwan Muhammad, also known as Andre Bangsawan, said that most construction contractors and building material entrepreneurs have already felt the effects of the dollar’s rise, but the impact is not yet significant. ‘It’s already noticeable. Building material costs have risen, but only partially — not too much yet,’ Andre said. However, if the government fails to anticipate the dollar’s rise within the next three months, the impact could be more severe. ‘The current impact isn’t significant because we still have ample material stock, especially as we’re building 1,000 houses. It might become serious in two to three months, with higher increases,’ Andre explained. Despite the potential significant impact if the dollar continues to rise in the coming months, the association remains committed to fulfilling the government’s 3 million housing program. ‘For us, the dollar’s rise won’t dampen our enthusiasm to support the 3 million housing program, especially with the 40-year loan tenure. We’re working to meet the government’s target,’ he said.