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View all search resultsDevelopers raise alarm as margins shrink for subsidized housing
Building homes for low-income families is becoming financially untenable, developers are warning, arguing that profit margins have been eroded by surging construction costs and a weakening rupiah.
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A woman and her child walk out of a subsidized house for media industry workers at the Gran Harmoni Cibitung Residential Complex in Bekasi, West Java, on June 5, 2025. (Antara/Fakhri Hermansyah)
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uilding homes for low-income families is becoming financially untenable, developers have warned, explaining that profit margins have been eroded by surging construction costs and a weakening rupiah.
The Association of Housing and Settlement Developers (Himperra) has called for an urgent adjustment to the government’s benchmark selling price for subsidized housing, arguing that the current pricing formula “no longer reflects economic reality on the ground”.
Mohammad Aviv, who heads Himperra’s division of organizational affairs, leadership development and membership, stressed that operational overheads were escalating from year to year while selling prices remained capped.
“The selling price should ideally be adjusted annually, as material and labor costs rise every year. Come 2026, we are not just facing a simple price hike, but a fundamental shift in the cost structure,” Aviv said on Tuesday, as Bisnis reported.
The government last revised the benchmark price in 2024.
Aviv added that the thinning margins were being compounded by a chain reaction set off by rising fuel prices. The volatility and depreciation of the rupiah against the United States dollar had further inflated logistics expenses and the cost of imported raw materials.
This has left developers of subsidized landed housing (MBR) with increasingly tight cash flows. For many, accelerating the disbursement of financing has become the only way to stay afloat.
