Indonesia’s residential property market experienced a slowdown in Q4 2024, with price growth remaining limited while sales declined significantly, according to Bank Indonesia's latest Residential Property Price Survey (SHPR). The survey recorded a 1.39% year-on-year (YoY) increase in the Residential Property Price Index (IHPR), slightly lower than the 1.46% YoY growth in the previous quarter.

Sales performance showed a more concerning trend. The primary residential market recorded a contraction of 15.09% YoY in Q4 2024. The decline was particularly noticeable in small and medium-sized homes, while demand for larger houses saw an increase. This trend indicates shifting consumer preferences amid economic conditions that may have affected affordability.

On the financing side, the survey highlighted that real estate developers continue to rely heavily on internal funds, which accounted for 74.38% of total funding for property development. Meanwhile, the majority of homebuyers in the primary market financed their purchases through mortgage loans (KPR), making up 72.54% of total consumer financing.

The SHPR provides insights into market trends across 18 cities in Indonesia, including Jakarta, Bandung, Surabaya, Yogyakarta, and Medan. The survey methodology was adjusted in 2018, with the base year updated to 2018 = 100 and weighting calculations based on mortgage collateral value at banks.

This data suggests that while property prices continue to grow, demand remains under pressure. Developers and policymakers may need to assess new strategies to stimulate the market, especially for small and mid-range housing, which experienced the steepest decline in sales.

PHOTO: ANTARA/ANDRY DENISAH

This article was created with AI assistance.