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Mortgage practices still far from fair: Consumers Foundation
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Keep building: Laborers work on a housing development for middle-income consumers funded by a state-owned bank in Serpong, South Tangerang. (Antara/Audy Alwi )
The Indonesian Consumers Foundation (YLKI) has found that mortgage practices are unfair and push customers too hard.
The organization recorded that there were many cases of developers selling houses that had not yet been built and others of developers refusing to hand over ownership certificates even after full payment has been made.
"Bank- and housing-related complaints are the most frequent complaints coming to us and a lot of consumers do not understand how the mortgage interest is calculated," YLKI spokeswoman Sularsi said on Thursday, adding that banks offer credit under ambiguous terms and conditions.
Indonesia needs to develop some 13 million houses per year to match the growth of its population, but the government can only provide 400,000 houses per year. The prices of houses, especially for those in the middle-income level, are skyrocketing.
Meanwhile, a researcher for the secretary-general of the House of Representatives, Inosentius Samsul, recorded that because of this situation a lot of Indonesians, particularly in urban areas, could not afford to buy houses, while a certain group of people purchased houses only for investment purposes.
"There is still a big gap between those who need but cannot get a house and those who own a lot of houses, small houses mostly, just for the investment,” Inosentius told thejakartapost.com.
Yusuf Shofie, an advocate, said that mortgages are still regarded as the way to own the house, but recently there have been monopoly agreements between developers and banks that make particular banks the exclusive mortgage providers for the developers' houses.
There are also some terms and conditions that place big loads onto consumers, Yusuf added. "When costumers want to speed up the payment of their mortgages they are charged a penalty by banks. This is strange. The banks should be happy because they can use the money for something else," he said. (bbn)
