Bank Indonesia channels Rp68.35 trillion in credit for 115,000 homes

Bank Indonesia Governor Destry Damayanti announced that approximately Rp68.35 trillion in new credit has been channeled into the housing sector, financing the construction of about 115,000 homes. This credit, particularly targeting low-income housing, is a result of the Macroprudential Liquidity Incentive (KLM) policy designed to boost financing for priority sectors such as green and inclusive development.

Despite these credit flows, the realization of subsidized housing through the Housing Financing Liquidity Facility (FLPP) reached only 160,070 units by the end of the third quarter of 2026, representing 45.73% of the government's 350,000-unit target.

Ferry Salanto, Head of Research at Colliers Indonesia, noted that the decline in subsidized housing sales should not be attributed solely to Gen Z lifestyle preferences. He emphasized that fundamental issues regarding affordability and bankability remain the primary obstacles. Challenges include rising house prices, down payment requirements, transaction costs, and the ability of young consumers to meet bank creditworthiness standards.