High cement price hampers construction of low-cost houses: REI
The Jakarta Post, Jakarta | Thu, 06/04/2009 7:36 PM
The soaring cement price has discouraged developers from constructing low-cost houses in Indonesia, the Indonesian Real Estate Association (REI) says.
“Developers can only earn as much as 5 percent in margin from the low-cost housing business,” REI chairman Teguh Satria said Thursday after filing a report with the Business Competition Supervisory Commission (KPPU) against the country’s three largest cement producers for allegedly practicing a cartel.
Low-cost houses require more cement for foundation of structure, wall and floor than regular buildings, Teguh said.
From 2004 to 2008, cement prices in the domestic market have increased significantly. According to the Business Competition Supervisory Commission (KPPU) data, retail cement cost approximately Rp 25,000 per sack of 50 kilograms in 2004. After four years, it rose to around Rp 40,000. (adh)
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