Presidential Pledge Guarantees Decent Housing for All Indonesians
President Prabowo Subianto has firmly pledged to guarantee decent housing for all Indonesians, casting this vital sector as a fundamental pillar of national economic growth and stability.
Speaking at an event in Cileungsi, Bogor District, on Monday, Prabowo underscored the dual significance of the housing sector, noting, “Housing is extremely important. Not only does it meet a basic need, especially for low-income citizens, but it can also serve as a powerful engine for growth.”
He publicly announced an ambitious and high-reaching goal of constructing three million homes, a target meant to underline his government’s resolve and commitment to aggressively meet the vast national demand for shelter.
In setting this demanding benchmark, the President invoked a famous adage from Bung Karno: “Aim for the sky. If you miss, you may still land among the stars.”
Prabowo further stressed that this expansive housing program would be continuously reinforced and pursued in parallel with equally critical national efforts to secure food and energy supplies.
He stated, “I believe next year we’ll build even more homes. We will secure housing, food and energy—all for the people,” signaling an integrated approach to meeting the public’s most basic needs.
This immense push is designed to stimulate demand across related industries, creating jobs and driving economic velocity through large-scale construction and property development activities.
Eight Policy Measures to Ease Access to Affordable Housing
The administration has meticulously mapped out an eight-point policy framework specifically designed to ease access to affordable housing, particularly for low-income groups, by systematically cutting costs, reducing bureaucratic friction, and injecting liquidity into the mortgage market.
Among the key measures to make home ownership more attainable, the government will introduce an exemption from the 5% land and building acquisition tax (BPHTB) for all eligible first-time homebuyers.
Furthermore, the process for obtaining necessary building permits (PBG) for subsidized housing will be made both free and significantly faster, streamlining development and reducing initial project costs.
To directly lower the financial burden on buyers, the government has committed to covering the Value Added Tax (VAT) for homes priced below two billion rupiah (approximately $122,000).
On the banking side, the policies aim to boost mortgage liquidity by lowering the reserve requirements for financial institutions from five to four percent.
Additionally, the government is substantially raising the annual subsidized mortgage quota (FLPP) from 220,000 units to a much higher 350,000 units, increasing the pool of available affordable home financing.
These strategic adjustments are intended to address systemic barriers, improve affordability, and ensure a robust supply of financing to sustain the large-scale development of new housing units.
Expanding Eligibility and Private Sector Participation
The government’s strategy goes beyond just financial incentives, actively seeking to widen eligibility for subsidized credit to include previously underserved segments of the population and expanding participation by private sector financial institutions in channeling crucial FLPP loans for housing.
Eligibility for subsidized mortgage credit has been strategically widened to encompass a broader spectrum of the working populace, including domestic workers, teachers, essential factory laborers, and employees in the informal sector, all of whom can now access the benefits of the housing programs.
This expansion is a direct effort to broaden home ownership across the entire socio-economic ladder.
Furthermore, the government is actively enlisting the participation of private firms in home renovation through the established Self-Help Housing Assistance Program (BSPS), leveraging private resources and efficiency to improve existing dwellings.
The policy changes also include expanding flexible mortgage options, giving buyers more diverse and manageable repayment structures.
Crucially, the government is now allowing private banks to channel the subsidized FLPP loans alongside traditional state lenders.
This move injects greater competition and capacity into the distribution of affordable housing finance, ensuring that the increase in the FLPP quota can be effectively utilized nationwide.
These comprehensive measures underscore the administration’s commitment to transforming housing from a constrained resource into an accessible right, utilizing both public policy and private sector collaboration to realize the goal of three million new homes.
