“We are currently working on the 1 million houses program [PSR] for the supply of houses for all layers of society, including millennials,” the ministry’s housing provision director general, Khalawi Abdul Hamid, said on
Wednesday.

President Joko “Jokowi” Widodo initiated the PSR in April 2015 as one of his national strategic projects, for the construction of 1 million houses per year for community members, based on Presidential Regulation No. 3/2016 on the acceleration of the implementation of national strategic projects.

In implementing the PSR, the government has cooperated with a number of stakeholders, including banks, developers and private companies.

As of 2018, 3,542,318 houses had been built under the PSR project. The year 2018 alone saw the construction of 1,132,621 houses, 13 percent higher than the annual target.

He said that this year, the government was expecting the construction of 1,250,000 houses, with millennials as the largest potential buyers.

The number of millennials, he said, was now estimated at 81 million, or approximately 30 percent of the total population in the country.

State lender Bank Tabungan Negara (BTN) has recorded that 6 percent of millennials earned an average income of Rp 12 million (US$847) per month, 14 percent earned Rp 7 million to Rp 12 million, 34 percent earned Rp 4 million to Rp 7 million and 46 percent earned less than Rp 4 million.

Khalawi acknowledged that the ministry had made efforts, including cooperation with BTN, which provides housing mortgages, to maximize the development of houses for millennials.

“To help millennials to buy houses amid price rises, BTN has provided new KPR mortgage products, including KPR Gaesss, with simple requirements,” said BTN president director Maryono, referring to housing loans (KPR).

Maryono said that with KPR Gaesss, millennials could purchase houses using a housing loan with an interest rate of 8.25 percent a year and a down payment of only 1 percent.

“Millennials aged between 21 and 30 who have had a permanent job for at least one year can buy a house with the KPR Gaesss scheme,” he said.

Since October last year, loans channeled through KPR Gaesss had reached Rp 6.9 trillion. BTN is targeting the loans to increase by Rp 3.17 trillion by the end of 2019.

In addition to KPR Gaesss, the government has provided subsidized houses for low-income communities, including a large number of millennials.

This subsidized houses come under various programs including House Financing Liquidity Facility (FLPP) and Interest Difference Subsidy (SSB).

This year, the number of houses built under the FLPP program is expected to reach 68,858 and those under the SSB program 100,000. The average price of subsidized houses will be raised from Rp 140 million to Rp 153 million each.

Khalawi said BTN was committed to helping finance the purchase of 127,104 subsidized houses, consisting of 28,744 under the FLPP program and 98,360 under the SSB program. So far, the number of subsidized houses sold via BTN has reached 75 percent of the total.

Research by the Housing Finance Center (HFC) has found that the national House Price Index (HPI) was 163.9 in the first quarter this year, an increase of 7.34 percent from the rate in the same period last year.

The HFC was established by BTN with the aim of organizing educational events, research and consultancy related to the property sector.

According to the research, Batang regency in Central Java had the highest HPI rate of 253.29 in the first quarter, reflecting a year-on-year increase of 20.44 percent after the opening of the Pemalang-Batang toll road in 2018.

Jember in East Java ranked second with an HPI rate of 252.20, followed by Batam in Riau Islands with 232.28, Bantul in Yogyakarta with 221.62, Banyumas in Central Java with 219.19 and East Jakarta with 215.50.

In addition, based on data from research conducted by Trisakti University, the country’s residential property prices have increased by 17 percent per annum.

The increase of property prices is at odds with the increase of consumers’ incomes, which rise by approximately 10 percent every year. (syk)

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