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Indonesian homeownership slides as affordability issues arise
The national share of households with a home of their own has fallen markedly over the past two decades. Jakarta recorded the lowest share last year. What lies behind the numbers?
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Despite increasing supply, Jakarta has the lowest rate of homeownership in the country, as workers flock to the capital to find jobs. (Tempo/Tony Hartawan)
H
omeownership in Indonesia has been dropping since 1999 as house prices have risen. Now, the affordability of homes is under further threat as a number of people face declines in real income as a result of the pandemic.
The national share of households with a home of their own fell to just over 80 percent last year from nearly 85 percent in 1999, according to data from Statistics Indonesia (BPS). Jakarta recorded the lowest share last year.
The fall in Jakarta homeownership is in line with the share of households renting a home in the city, at 37.71 percent last year, higher than any other province, as workers flock to the capital to find jobs.
Although some provinces ended up with a higher homeownership rate after the first 20 years of the century, Jakarta posted the steepest decline between 1999 and 2020. Now, fewer than half of all households in the capital city live in their own home, down from nearly two thirds.
“It is indirectly related [to affordability],” said Wendy Haryanto, the executive director of the Jakarta Property Institute (JPI), a nonprofit that facilitates dialogue between the government and real estate firms.
“The rise in our income is very little, while property prices have been rising astronomically. So, the gap is increasing and housing is becoming less and less affordable,” Wendy told The Jakarta Post in a phone interview on Wednesday.
The housing market has taken a blow from the pandemic-induced economic slump, as reflected in declining quarterly sales last year. However, sales have since rebounded, growing 13.95 percent year-on-year (yoy) in the January to March period, according to Bank Indonesia’s (BI) latest survey of developers in 18 cities. The growth was driven by a rebound in sales of homes measuring 36 to 70 square meters.
