With Housing Sales Slumping, Developer Boss Hopes This Will Save the Market

Developers say the national housing market is not in good shape. Sales of subsidised and commercial housing have declined in many areas, including those that have traditionally supported the property market such as West Java and Central Java. In the face of weak demand, the Real Estate Indonesia (REI) leadership sees a glimmer of hope in the government’s plan to extend the mortgage tenor (KPR) to 40 years. The policy could widen access to housing for low-income households that have struggled to obtain bank financing.

‘The President is bold to articulate something we have long fought for; extending by just 10 years would have been difficult, but doubling it to 40 years opens a large opportunity,’ said Nelly Suryani, deputy chairman of the DPP Realestat Indonesia (REI) or commonly known as Maria, during the Media Innovation Discussion on Housing Financing for Informal Workers in Kemang, South Jakarta, on Friday, 22 May 2026.

So far, the uptake of subsidised KPR FLPP has been largest among households in the 4th to 6th deciles. With a longer tenor, monthly repayments are said to be much cheaper, enabling households earning around Rp2 million to access subsidised housing.

‘If the tenor is extended to 40 years, repayments would drop to around Rp773,000. Banks typically require one-third of income, so this could reach households earning between Rp2.3 million and Rp2.5 million,’ Maria said.

She outlined the condition of subsidised housing sales among REI members, which she said were in trouble. As of 21 May 2026, REI members’ FLPP realisations stood at around 24,000 units, about 42% of the national total of 59,458 units.

‘What is worrying is the numbers—not even 30,000. West Java, which is usually strong, has grown only 24 percent, while Central Java fared worse,’ she added.

This situation indicates the national property market is under heavy pressure. In fact, several regions that previously led subsidised housing sales are losing momentum.

‘The overall REI realisations across 37 DPDs are in very difficult condition,’ Maria concluded.