Home PROPERTY Home Ownership Loan Program (KPR) Is the Cause of Property Sales Rise

Home Ownership Loan Program (KPR) Is the Cause of Property Sales Rise

The housing loan program or KPR facilities provided by banks are allegedly the cause of the increase in property sales. Moreover, the government has issued many regulations and incentives to encourage the progress of the property industry which is one of the drivers of the national economy.

Some of the property incentives include the extension of the government-borne value-added tax (PPN DTP) stimulus until the end of September 2022 and the extension of the 0 percent down payment policy until the end of December 2022.

The low benchmark interest rate of Bank Indonesia (BI) at the level of 3.5 percent keeps the mortgage interest rate low and is expected to increase demand for residential properties in 2022.

At the same time, BI has also extended the down payment incentive (DP) of 0 percent and the provision of credit or property financing with a loan to value (LTV) ratio of up to 100 percent until December 31, 2022.

LPKR’s CEO John Riady, on Wednesday (16/3/2022), said “Interest rates for residential ownership loans have also decreased, which has also encouraged interest in buying through mortgages.”

From the market side, John added that the government’s stimulus for the property industry makes consumers more confident to buy property. The property industry has bright prospects for sustainable growth.

In 2022, LPKR itself is targeting pre-sales of Rp5.2 trillion, supported by the launch of affordable landed houses, deeper market penetration to also include customer segments with higher incomes and increased demand for ready-to-live apartment units.

The high interest in mortgages is in line with the sales component of LPKR, which is dominated by the sale of landed houses in the Cendana cluster in Lippo Village and Waterfront Estates in Cikarang.

This was conveyed by Ciptadana Sekuritas Asia in a report entitled Market Outlook 2022: Property Sector. They mentioned that property sector performance is predicted to grow in 2022, one of which is LPKR.

As is known, in 2021, LPKR recorded a pre-sale of Rp4.96 trillion, of which about 58 percent of the total pre-sale chose the mortgage option as the payment method, 22.5 percent paid cash, and 19.3 percent paid through installments.

“The property market will bounce back in 2022, so we view the property sector as overweight. One of the property issuers that will show solid sales is LPKR,” said Ciptadana Sekuritas Asia.

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