RESIDENTIAL PROPERTY PRICE SURVEY FOR PRIMARY HOUSE elec) Crore i Bree eee na) Pee Mest cn Acoma irs er) id medium houses were the main drag on s DRT power, high lending rates on housing loan, and high level of housing prices as the most binding aCe Sine oer p! cet sought nonbank residential prope financing elopers relying on internal funds. On t Tee The latest Residential Property Price Survey conducted by Bank indonesia in the second quarter of 2019 confirmed slower rising residential property prices compared with conditions in the previous period, as reflected by declining quarterly growth of the Residential Property Price Index (RPPI) to 0.20% (gta) from 0.4: (qtq) in the last period (Graph 1). The survey respondents cited more expensive building materials and higher wages for rising residential property prices in the second quarter of 2019. Quarterly price growth decelerated for all residential property types _In the second quarter of 2019, the price of small residential properties increased by 0.37% (qta), down from 0.72% (qta) in the previous period, while the growth of medium residential property prices decelerated from 0.60% (qtq) to 0.18% (qiq) and large residential property prices from 0.20% (ata) to 0.03% (tq). Regionally, respondents in the majority of surveyed cities acknowledged slower rising residential property prices, with respondents in Batam 3.01% gta) and Bandar Lampung (0.01% qta) reporting the deepest residential property price contractions. Residentiat Property Price Survey for Primary Housetg eo ee (gee asoa7 . ee ee t: roe SS Residentiat Property Price Survey for Primary House 2Growth of residential property priceswas in line withthe decrease. recorded in the cost of housing expenses borne by households Cra Me eee (index) 09, 174,28, 27583 a * ation mre Ls ‘=Be% change (aT) =m change VO") Annual price growth also decreased from 2.04% (yoy) in the first three months of 2019 to 1.47% (yoy) in the reporting period, with the slowdown affecting all property types. The price of small residential properties increased 2.18% (yoy) in the second quarter of 2019, decreasing from 3.18% (yoy) in a previous period, while the price of medium houses decelerated to 1.32% (yoy) from 1.82% (yoy) and large houses to 092% (yoy) from 1.16% (yoy). By region, respondents in Medan (3.77% yoy) reported the strongest residential property price gains, followed by Banjarmasin (3.11% yoy). Slower RPPI growth in the reporting period was inline with a smaller increment in the housing expenses borne by households, as reflected by a decline in the housing expense component of the Consumer Price Index (CPI) from 1.13% (tq) to 0.18% (qtq) in the second quarter of 2019 (Graph 5). oy Emer) (ara) eximation ‘em>change in RPPI (gta) ‘=echange in CPI (gta) Residentiat Property Price Survey for Primary HouseResidential Property Sales Respondents confirmed a quarterly decline in residential property sales during the three pepo one months to June 2019, contracting by -15.90% (qtq) after expanding 23.77% (gtq) in the Seve previous quarter and compared with a -0.08% (qtq) contraction in the same period one year seoed jaarter of 2019, earlier (Graph 6). The main drag on residential property sales in the second quarter of 2019 ‘were small residential properties (-23.48% atq) and medium residential properties (-12.88% gtq), contrasting stronger sales of large residential properties that accelerated from 24.56% (qtq) to 3308% (gta). ‘According to the survey, most respondents stated that retreating purchasing power, high lending rates on housing loans, inflated house prices as well as licensing/bureaucracy problems were the most binding constraints to faster sales growth in the second quarter of 2019, Based on Monthly Commercial Bank Reports, lending rates on housing loans averaged 9.43% in the second quarter of 2019 (une 2019), lower than the 9.53% reported in the first quarter of 2019 (March 2019). Regionally, the highest mortgage rates were listed in South Kalimantan (14.75%) and the lowest in Yogyakarta (8.39%) (Graph 8). By bank group, however, Regional Banks offered the highest mortgage rates at 11.86%, while the lowest rates were available from Foreign and Joint Venture Banks at an average of 7.05% (Graph 9). Tl tType of Small House -e-Type of Medium House —a-Type of BigHouse Total can Pen -s-Type of Small House -e-Typecof Medium House —inType of BigHouse Total Residentiat Property Price Survey for Primary House 4nr ‘Tad 5; — a iL (eI : i, i us tS a 27 4 << a 223 i_ «123 Eo _—_, oe ‘in a 8 ey a 1 — a 3 \ ae ot SE vou a Source: Monthly Report of Commercial Bank 13,00 186 93 9a : : 600 State Owned Private Foreign Banks Regional tate ll Bank Banks Natlonal Banks & Joint Banks Oued Banks ar2019. miuna9 ‘Source: Monthy Report of Commercial Bank Residential Property Price Expectations Respondents predicted the pace of rising residential property prices to regain momentum in the third quarter of 2019, as corroborated by an increase in the Residential Property Price Index (RPP to 0.76% (qtq) from 0.20% (qta) in the previous period. Respondents ‘expected all house types to drive the gains, led by small residential properties that were predicted to accelerate from 0.37% (qtq) to 1.74% (qta). The respondents also predicted annual price growth to pick up in the third quarter of 2019, with the corresponding RPPI expected to strengthen from 1.47% (yoy) to 182% (yoy). The respondents are anticipating all house types to contribute, especially small residential properties that experienced an increase in the RPPI fram 2.18% (yoy) to 3.26% (yoy). Regionally, residential property prices in Medan (4.13% yoy) were predicted to lead the gains in the third quarter of 2019 (Graph 10). Respondents predicted residential property prices to regain momentum. Residentiat Property Price Survey for Primary House 5on one samo" + Estimation Residential Property Financing Property developers ‘continued to rely on internal funds, while ‘consumers stil favoured housing loans. |_ ie oo Pre oo tintin In the second quarter of 2019, the majority of respondents (60.57%) depended on internal funds to finance residential property development, followed by bank loans (27.54%) ‘and payments from consumers (9.80%). Regarding the composition of internal funds, most, was sourced from retained earnings (58.9%) and paid-up capital (37.0%) (Graph 11). On the consumer side, housing loans remained the dominant form of financing for residential property purchases, accounting for 74.32% of respondents, followed by cash instalments (19.05%) and cash (6.64%) (Graph 12). eee internal Fund Residentiat Property Price Survey for Primary House ‘Banks Loan ‘customers.= House Ownership Loan =)Cash instalment =)Cash Congruent with declining residential property sales in the primary market, growth of housing loans decelerated n the second quarter of 2019 to 0.70% (qtq) from 4.02% (qta) in the previous period and annually to 12.79% (yoy) from 15.67% (yoy). In addition, Housing Financing Liquidity Facility (FLPP) disbursements totalled RoT,688 trillion in the second quarter of 2019, down from Rp2,664 trillion in the previous period. Cumulatively, therefore, FLPP disbursements reached Ro4,352 trillion in the first semester of 2019, equivalent to 61,3% of the Rp/,1 trillion targeted for 2019 er rac per S omen pure aah in ae A = = PIPL OP OPER PEELS : . emia 15) eChange fon -AHS Source: Monthy Report of Commercial Bank Source: Mins fPblrousg e-change (gts) te change (oy) Residentiat Property Price Survey for Primary House 7a7 [ora em | sor 23 [or are | asasr | assre | srs | aise | pene [ora sau | i sean | aoe | mins “orm _| a Sit ‘ora eo 13638 since _| tm. an * estimation Revised Residentiat Property Price Survey for Primary Housecae Residential Prope lex Growth by Region (eso 30202 = 100) - om wa tie te | te | et tis B - wm fas | au | oe sa Residentiat Property Price Survey for Primary House 9coe Peete eet (anuary until June 2019) Ss untTs fore ACH 510 397 509 950 eau 378 791218750 aNTEN 2385 255.678.955.000 BeNGKUL 738 @115.171250 [SPECIAL REGION OF YOGYAKARTA, 26 344.525 000 aK ARTA a 257 HI AIS [eaRONTATO. 207 Ta 157516 750) Ta Ta6 Ta) 57 799771 [west Java T1701 1150.952,672.669 TAL JAVA Tae T2a577 20568 AST JAVA 2502 223.368.279.305 [WeS= KALMMANTAN 2158 22.855. 747 ABA SOUTH KALIMANTAN 2084 207 595.457 250 TTRAL KALIMANTAN. 262 "34,683, 844,000 EAST KALIMANTAN 335 35.557482.500 INOETH KALIMANTAN 7 2.715 885.000, BANSKA BELITUNG SLANDS| 564 54.436 996.500 RIAL ISLANDS a7 A717 549.250 TAMPUNG 1014 90,692.086.687 ALOK, 2 2,450.325.000, NORA MALUKU a 2.962.950.000, [WEST NUSATENGGARA, 510 53.579.200.625 EAST NUSA TENGGARA, 284 30.118.361.250 PAPUA 459 5.822.917.0687 West PAPUA 3 -25.573,705.000 au 139 151.608.951.750 west SULAWES 380 34427.590.000 SCUTH SULAWESI 2577 247 238.757 000 CFRTRAL SIH AWESI 7H 7 54 75 0 SOUTHEAST Sim AWESI oT RANT 400515 NORTH SULAWESI 7a @8.875.119.381 [west SuMATERA 708 5.525 087-500 SOUTH SUMATERA 3208 25a S169 125 INCRTH SUMATERA 3358 300.014.226.250 TOTAL 45.28 ee Source: Ministy of Pubic Housing Residentiat Property Price Survey for Primary House 10IWant at 17 Bank Inc the fir Pm Sea sic) mae Pelee aerate