Infrastructure as the main driver of property market growth
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Kontan Online - Infrastruktur pendongkrak utama pertumbuhan pasar properti
16 December 2024
Kontan.co.id – Jakarta. Infrastructure is a key driver of growth and development in the property market across various regions of Indonesia. Research from Pinhome indicates that demand for home purchases increased by up to 21% in areas with significant infrastructure development in the third quarter of 2024.
Dayu Dara Permata, CEO and Founder of Pinhome, stated that the extensive infrastructure development in Indonesia has improved access and connectivity between regions, thereby boosting the property market.
"Housing demand has increased, particularly in areas with infrastructure advancements such as Java, Bali, Lampung, and East Kalimantan. The construction of the Solo-Yogya toll road, the Bali LRT project, and the development of Nusantara Capital City (IKN) are the main driving factors," Dayu said in a statement on Sunday (15/12).
According to the Indonesian Residential Property Market Report for the third quarter of 2024 by Pinhome, infrastructure development has also led to a significant increase in the availability of new housing. In Sidoarjo Regency, the availability has more than tripled, while in Tangerang Regency, it has increased by 34%. This growth is driven by the construction of the Djuanda Flyover in Sidoarjo and the Kamal-Teluknaga-Rajeg-Balaraja (Kataraja) toll road project in Tangerang Regency.
In addition to property sales, infrastructure development also impacts rentals. The LRT development has boosted apartment rental demand in North and East Jakarta by up to four times, driven by the Jakarta LRT Phase 1B project and the Jabodebek LRT.
Additionally, the Pinhome report indicates that home or apartment ownership loans (KPR/KPA) have experienced positive growth, with sharia KPR and KPR takeovers gaining more interest in the third quarter.
KPR and KPA recorded a growth of 9% in the third quarter, with sharia KPR financing growing by 13% in the third quarter of 2024, including a twofold surge in the 15-year fixed interest scheme. Meanwhile, KPR takeovers increased by 26%.
Property demand in suburban areas has increased by as much as 85%, with property purchase financing transactions in Greater Jakarta largely originating from these areas. This trend indicates that improved inter-regional connectivity is driving property demand in buffer zones.
There is also significant growth in the inventory of second-hand homes. "The total inventory growth of second-hand homes in Indonesia reached 33% in the third quarter of 2024. Yogyakarta (62%) and North Sumatra (46%) are leading this growth, primarily driven by homes with a type less than or equal to 54," explained Dayu.
Dayu added that Pinhome is committed to providing solutions for the Indonesian people to leverage these opportunities and realise their property dreams. Founded in 2020, Pinhome aims to facilitate access to home ownership, particularly for first-time buyers, across all segments of society.
Internal data indicates that 4 out of 5 Pinhome users are prospective first-time home buyers. Pinhome offers home search services with 80% of the options being affordable housing priced below Rp3 billion.
