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ajor developers are welcoming the central bank'€™s plan to loosen its mortgage policy and a possible plan to allow foreign ownership of luxury apartments, saying that they will help to balance the industry amid an economic slowdown and challenges stemming from an upcoming revision of property taxes.

The government last week unveiled a plan to allow foreigners to own luxurious apartments in the country, where foreign ownership is currently banned for all properties except the '€œstrata title'€ types of apartments and condominiums. The government only intends to allow foreigners to own expensive apartments, for which it plans to set a minimum price. Meanwhile, in response to the country'€™s economic slowdown, which in the first quarter touched its lowest growth level since the start of a global financial crisis, Bank Indonesia has also pledged to ease its loan-to-value (LTV) policy on property and automotive purchases, a policy that pinched the real estate industry after it came into effect in late 2013.

Ciputra Development finance director Tulus Santoso said recently he estimated his annual marketing sales will increase around 20 percent over its targeted figure if the government decides to ease the LTV regulation, saying that it was good news amid an industrial slowdown.

'€œThe impact of the LTV regulation has been so profound on our business that we saw our marketing sales plunge in the year after the regulation became effective,'€ he said.

Ciputra booked Rp 8.6 trillion (US$655 million) in marketing sales last year, down from the Rp 8.9 trillion it pocketed in 2013.

The mortgage regulation also came into effect in late 2013, requiring a buyer to provide at least a 30 percent down payment when purchasing a first house if it was larger than 70 square meters. The requirement increases to 40 percent for a mortgage for a second-house purchase and rises to 50 percent for the next purchase.

Publicly listed developer Pakuwon Jati'€™s business development director, Ivy Wong, said that while the LTV regulation did not impact the company'€™s business directly '€” given that only a few of its customers use bank loans for their property purchases '€” she said that the central bank'€™s move would help the market and benefit her company through spill-over sales.

Ivy further added that her company would feel a bigger impact from the government'€™s plan to allow apartment ownership for foreigners as it better match the company'€™s property portfolio. Pakuwon operates a number of luxurious high-rise residences in Jakarta and Surabaya, East Java.

'€œIt will bring a significant impact for our company as our products are loved by foreigners. We expect to see higher demand and sales onward,'€ she told The Jakarta Post over the phone. '€œThe policy will lead to a better transparency and legality for foreign purchases.'€

Theresia Rustandi, deputy chairwoman of property association Real Estate Indonesia (REI), said that she saw the central bank'€™s move to loosen LTV as a supportive move for the industry, adding that better access for foreigners to purchase properties in the country was a relaxing news amid the government'€™s hope to boost tax income from the industry.

The government has planned to lower its property income tax threshold to Rp 5 billion from the former Rp 10 billion, requiring buyers to pay a 5 percent luxury tax that is deductible from their annual income tax, which is scheduled to come into effect next month.

'€œDevelopers need room to breathe amid tightened regulations hither-and-yon and the upcoming tax revision will certainly lead to a loss in a certain segment in the market,'€ she said.

'€œThere is a high enthusiasm for foreigners to have their own properties in Indonesia and by allowing them to buy only luxurious apartments, it means there will be a replacement for those gaps, which will be subject to the government'€™s tax.'€