The housing sector is projecting to grow positively during the Covid-19 pandemic. It can realize if all business actors work together, and the housing sector can encourage national economic recovery.
Haru Koesmahargyo, President Director of PT Bank Tabungan Negara Tbk (BTN), said that the sector is pretty resilient. As reflected in the sectoral GDP growth in the first quarter of 2021, where the real estate sector was still able to grow positively by 0.9% when the national economy contracted minus 0.74%. . In other words, the housing sector is still capable of driving the economy during a pandemic.
Although in the first quarter of 2021, economic growth still contracted minus 0.2%, it started to improve compared to the fourth quarter of 2020, which reached minus 2.2%. With the improvement in economic conditions, there is potential for significant growth in the housing sector.
Haru said one of the factors that made the property sector resilient during economic growth contractions was because this sector is a capital-intensive and labor-intensive sector, where 90% of the raw materials in building houses also come from within the country. He also mentioned that the housing sector has a great potential to be developed in the next few years.
He assessed that Indonesia’s mortgage-to-GDP ratio in 2020 would be around 2.94%. This figure is much lower than other Southeast Asian countries, such as Singapore, which reached 44.8%, Malaysia 38.4%, and Thailand 22.3%. This condition creates enormous potential for the growth of the housing sector.
“Not to mention that the backlog of houses is still high at around 11.4 million units and families living in uninhabitable houses are around 55.6%,” he explained.
He assessed that the prospect of the property sector is getting brighter with massive infrastructure development and the growth of the middle class, which is 2025 will be estimated to reach 77 million people. “The number of new marriages every year reaches 1.8 million units. This new household certainly needs a house. With these various supporting factors, I am optimistic that the revival of the property sector will continue to be beneficial in restoring the national economy,” he explained.