Indonesia Faces Housing Backlog Challenge, Minister Calls for Solutions

Bingkai Karya – Indonesia is grappling with a significant housing shortage, with State-Owned Enterprises (SOEs) Minister Erick Thohir highlighting the urgency of addressing the issue.

The country currently faces a backlog of 12.7 million housing units, while the current construction rate of 600,000 units annually is far from sufficient. This challenge is further amplified by the growing urban population, with 52% of Indonesians now residing in cities.

Minister Thohir emphasized the need for innovative solutions, specifically focusing on supporting young people in achieving homeownership. He urged Bank Tabungan Negara (BTN), a bank specializing in home ownership loans (KPR), to play a crucial role in this endeavor.

Collaboration is key, according to the minister. He encouraged BTN to partner with various entities like the national railway company (PT Kereta Api Indonesia), the national housing developer (Perumnas), and the Public Works and Public Housing Ministry (PUPR). These collaborations could help identify potential land for housing development and explore alternative housing options like vertical housing buildings or apartments.

Furthermore, Thohir proposed extending the loan term for non-subsidized mortgages from 20 to 30 years. This, he believes, would ease the financial burden on potential homeowners and facilitate timely repayment of subsidies. Additionally, he suggested discounted interest rates on non-subsidized mortgages as another potential solution.

By implementing these and other innovative approaches, Indonesia can strive to bridge the housing gap and ensure affordable and accessible housing for its citizens.


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