10 May 2022 (closed)
Jakarta Composite Index (6,819.79) -89.96 -1.30%
USD/IDR (14,146) -6.00 -0.04%
EUR/IDR (17,335) +57.05 +0.33%
The government of Indonesia may succesfully curb the nation's housing backlog figure to 6.8 million units by 2019. Providing adequate housing for the poorer segments of Indonesian society is one of the key tasks of the Indonesian government (for example through its 'one million houses' [per year] program). In 2015 Indonesia's housing backlog declined by 16 percent (y/y) to 11.4 million units according to the data from Indonesia's Statistics Agency (BPS). With enough effort of the government and private sector the figure should continue to drop in the foreseeable future.
Zulfi Syarif Koto, Chairman of the Housing Urban Development (HUD) Institute, says Indonesia's state-owned enterprises, regional government-owned enterprises, the private sector, as well as cooperations and the Indonesian people should all undertake action to boost the construction of houses and thus curb Indonesia's housing backlog. Koto states that the people of Indonesia may actually be the biggest power to overcome the housing backlog. In the rural areas the rural communities can join hands (and financial resources) to construct houses for their community-members (the so-called gotong royong).
However, it will require a conducive investment climate in order to encourage investment in housing construction (particularly for the lower-income Indonesians) and here it is where the government plays a key role. The government can make it attractive for public and private companies as well as for local communities to engage in investments, for example by making it easier to obtain construction permits, offer tax incentives, assist in the difficult land acquisition process, offer insurance and provide additional supportive infrastructure such as roads.
Meanwhile, Eddy Ganefo, General Chairman of the Association of Housing Development in Indonesia, says the government has the responsibility to provide sufficient housing for its citizens. Although this does not mean that the Indonesian government should be responsible for building all houses across the country, it does mean that the government needs to support either those who seek to buy houses (for example by offering relatively cheap mortgages) or to support those that develop the housing projects (for example by safeguarding a fast and easy permitting process).