Home Sales in Q1 Plummet 25.67 Percent

Bank Indonesia's latest Residential Property Price Survey reveals a significant downturn in the property market, with sales plummeting by 25.67% year-on-year during the first quarter of 2026. This sharp contraction marks a reversal from the positive growth observed in the fourth quarter of 2025, indicating a cooling market.

The data highlights a mixed performance across different property segments. While sales of medium-sized residential units saw a notable increase of 8.28%, sales of small and large units experienced substantial declines. Small property sales contracted by 45.59%, a stark contrast to their strong growth in the previous quarter, and large property sales also fell by 8.03%.

Several factors are identified as primary obstacles to property development and sales. The survey points to rising construction material costs as a significant contributor, accounting for a 20.97% impact on the decline. Additionally, issues related to permits and bureaucracy, high mortgage interest rates (KPR), substantial down payment requirements, and taxation policies continue to challenge developers and potential buyers.

Despite the overall sales slump, the price of residential properties in the primary market showed limited growth, with the Residential Property Price Index (IHPR) increasing by 0.62%. This suggests that while demand has weakened, property values have remained relatively stable. Developer financing predominantly relies on internal funds (80.66%), while consumers largely utilize mortgage schemes (69.87%) for purchases, underscoring the importance of KPR accessibility in the market.