Jakarta Indonesia Sentinel — The Indonesian government’s push to provide free housing through its “3 Million House Program” initiated by President Prabowo Subianto has sparked unexpected challenges for the property sector. Developers report a sharp decline in property bookings as potential buyers cancel plans, hoping to secure free homes instead.
According to CNBC Indonesia, Chairman of the Indonesian Real Estate Association (REI), Joko Suranto, revealed that the free house program has led to a significant drop in consumer interest, with booking cancellations rising by an estimated 30%.
“Free housing is creating confusion for developers. Many potential buyers are canceling bookings after hearing about the free housing program. Out of every 10 bookings, one to three are now being withdrawn,” Joko said during a press conference at REI’s office in South Jakarta on Wednesday, November 20, 2024.
Placing down payments for home purchases is a crucial first step toward homeownership for many Indonesians. However, the widespread cancellation in bookings has raised concerns about a slowdown in the real estate sector, potentially stalling its growth.
Joko also stated that the issue extends beyond REI members, impacting the broader real estate industry. “This isn’t just affecting REI members—it’s everyone in the property industry. People are confused, potential buyers are questioning the program, and this uncertainty is hitting the market hard,” he added.
The confusion stems from widespread assumptions that the government’s program would provide homes entirely free of charge. As a result, many consumers have put off purchasing homes, hoping to qualify for the initiative.
“When the government announces free housing, it paralyzes the property industry. People stop buying or delay their purchases, thinking they’ll get a free home,” Joko explained.
The 3 Million Homes Program was launched by Minister of Housing and Settlement, Maruarar Sirait early November 2024. The initiative kicked off with the construction of 250 free homes in Sukawali Village, Tangerang Regency.
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Junaidi Abdillah, chairman of the Indonesian Housing Developers Association (APERSi), emphasized that free housing should be allocated to low-income individuals to ensure it reaches those who need it most. He also urged the government to socialize and clearly communicate the eligibility criteria for receiving free homes.
“I hope these free homes are genuinely intended for underprivileged people earning less than 1 million rupiah per month, not those who are financially stable. This needs clarification,” Junaidi stated, cited from Detik.
He noted that the lack of clear information has caused widespread misunderstandings, further dampening activity in the property market.
As developers grapple with declining bookings and uncertainty surrounding the free house program, industry leaders are urging the government to address the misinformation and establish clear guidelines for its implementation. Without such measures, the program could unintentionally disrupt the already fragile property sector.
(Raidi/Agung)
