Haswidi, The Jakarta Post, Jakarta
Vice President Jusuf
Kalla says the state will subsidize interest
payments on loans taken out by developers for
the construction of low-cost housing to the
tune of about Rp 15 trillion (about US$16.4
billion) over five years.
"The government will
provide interest-payment subsidies to
developers, and work hand-in-hand with local
administrations to simplify permits and
eliminate various types of unnecessary local
taxes," the Vice President told reporters
Thursday in Jakarta as quoted by Bloomberg.
Kalla said the
President had signed a decree to accelerate
the construction of such homes.
"There's too big a
gap in our cities between the rich, with their
big houses, and the poor who cannot afford to
buy homes," he said.
The government plans
to build 1,000 low-cost apartment buildings in
10 cities over the next five years, with each
building expected to consist of 100 apartments.
"Each apartment will
cost Rp 150 million," Indonesian Real Estate
Developers Association (REI) chairman Lukman
Indonesian Chamber of Commerce chairman
Mohamad S Hidayat, who also owns a real-estate
business and once served as REI chairman, said
that Kalla had given REI a mandate to put the
low-cost housing program into effect.
"It just so happens
that the Vice President has a background in
business. You get the chance to talk and make
suggestions to him. He is very eager to see
this housing program being realized," Hidayat
told the REI's annual conference Thursday at
the Sultan Hotel, Jakarta.
Hidayat said that
providing housing for low-income groups had
been one of the REI's priorities for decades.
"I remember when only
Bank Tabungan Negara was interested in
providing loans for low-cost housing
developments. But now, more and more state and
private banks are participating, offering
various credit schemes for low-income groups,"
"I hope that this
program will be supported by the banking
sector through lower lending rates," he said,
while at the same time criticizing the
tardiness of the banking sector in reducing
lending rates in line with the reduction in
the central bank rate to 9.75 percent.
country's state and private banks are offering
loans at rates ranging between 13.5 and 17
According to Bank
Indonesia figures, loans have contributed to
33.6 percent of total investment by the
property business this year, with this
contribution expected to grow to 36.5 percent
Also speaking at the
meeting, the consumer-affairs director of
state-owned Bank Rakyat Indonesia (BRI), Toni
Soetirto, said that BRI would provide
subsidized budget housing loans for those with
incomes of less than Rp 2 million per month.
The loans would be available from 486 BRI
branches around the country.
Aware of the complex
paperwork required for securing a loan, Toni
said that BRI would introduce a centralized
approval process to speed up the process.
"The growth in budget
housing loans has been low in Indonesia. The
ratio is only 1.4 percent to GDP, while in
Thailand the equivalent ratio stands at 4.4
percent, and in Malaysia at 27.7 percent," he