Unscrupulous housing developers under scrutiny for disrupting ecosystem and harming consumers and banks

The government has highlighted numerous cases of unscrupulous housing developers causing harm to consumers and banks. These practices are deemed to have damaged the housing ecosystem, including tarnishing banks’ reputations through manipulation of mortgage applicants’ data.

Technical Advisor to the Ministry of Housing and Settlement (PKP), Harry Endang Kawidjaja, stated that developers and banks receive regular notifications about data discrepancies and early warning systems. Therefore, if large-scale irregularities are detected, it is almost certain that someone is deliberately manipulating the data.

“If the numbers accumulate, developers cannot be unaware. It could be sales staff or mortgage administrators involved,” he said during a media discussion on housing finance innovation for informal workers in Jakarta, on Monday, 25 May 2026.

Harry added that banks already have risk mitigation mechanisms to detect credit disbursement anomalies. When issues arise in specific areas or projects, banks can immediately tighten funding disbursement. “Banks are aware of this, and their mitigation is to reduce funding flow in problematic areas,” he said.

He further noted that cases of unscrupulous developers should not erode public trust in the overall housing finance industry, as the banking sector is highly regulated, with all activities under regulatory oversight and layered monitoring systems.

“This is like a drop of ink spoiling a whole glass of milk. Therefore, all housing ecosystem stakeholders must collectively safeguard the industry,” Harry said.

Property analyst Marine Novita warned consumers against manipulating data to secure mortgage approval, as such practices could harm them directly.

“All players in the housing ecosystem must uphold public trust in housing finance programmes that help people obtain affordable homes legitimately,” she stated.

“If this continues, consumers may lose faith and the industry will suffer. Therefore, associations, developers, banks, and the entire ecosystem must collectively protect this business,” she added.