Bank Indonesia (BI) has recently disclosed the outcomes of its Residential Property Price Survey (SHPR), shedding light on the dynamics of residential property prices in the primary market during the third quarter of 2023. According to Erwin Haryono, the Executive Director of BI’s Communication Department, the Residential Property Price Index (IHPR) for Q3 2023 has exhibited a year-on-year growth of 1.96 percent, surpassing the previous quarter’s 1.92 percent.
While these figures reflect an upward trend in property values, Erwin Haryono cautions that the sales performance of residential properties in the primary market during Q3 2023 has not fully rebounded. Despite an improvement from the previous quarter, residential property sales contracted by 6.59 percent on a year-on-year basis.
The escalation in the prices of small and medium-sized houses during Q3 2023 closely aligns with the growth observed in the preceding quarter. Small house prices saw a 2.11 percent year-on-year increase, slightly lower than the 2.22 percent recorded in Q2 2023. Similarly, medium-sized house prices experienced a 2.44 percent year-on-year increase, down from 2.72 percent in Q2 2023.
In terms of geographical distribution, the rise in house prices during Q3 2023 was particularly prominent in Pontianak with a 3.00 percent year-on-year increase, Padang with 1.59 percent, and Batam with 4.07 percent.
Quarterly data reveals that the prices of primary residential properties maintained their robustness in Q3 2023, exhibiting a 0.57 percent quarter-to-quarter increase, surpassing the growth observed in the preceding quarter (0.48 percent).
This sustained strength in residential property prices is primarily attributed to the upward trajectory in the prices of medium-sized houses, which saw a quarter-to-quarter increase of 0.52 percent, and large-sized houses, experiencing a 0.59 percent quarter-to-quarter increase. Meanwhile, the growth of small house prices decelerated from 0.75 percent in the previous quarter to 0.62 percent in Q3 2023.
Spatially, the quarterly increase in IHPR Primers was notably observed in Pontianak with a 2.44 percent quarter-to-quarter uptick, Padang with 1.33 percent, and Pekanbaru with 0.58 percent.
Moreover, the survey findings indicate that developers primarily rely on non-banking financing sources, with internal funds contributing a substantial 73.46 percent share to the financing of residential property development.
From the consumer’s perspective, mortgage loans (KPR) remain the predominant financing scheme for primary home purchases, constituting a significant 75.50 percent share of total financing.
This comprehensive analysis underscores the intricate dynamics of Indonesia’s residential property market, where price movements, sales performance, and financing sources collectively contribute to shaping the landscape of the real estate sector.