NEW DELHI, November 8: Indonesia’s new-home prices rose only 0.58% year on year in the July–September quarter of 2026, slower than 0.69% in the previous quarter, while sales of new homes fell 8.43%, Bank Indonesia’s quarterly residential property price survey showed. Sales dropped across all house types, the central bank said.
Key highlights
- Prices: the Residential Property Price Index for the primary market rose 0.58% year on year in the third quarter, down from 0.69%.
- Sales: new-home sales fell 8.43% year on year, with declines in small, medium and large houses alike.
- Developer funding: 73.94% of developers’ financing came from their own internal funds.
- Buyers: 70.68% of new homes were bought with mortgages (KPR).
| Indicator | Q2 2026 | Q3 2026 |
|---|---|---|
| Residential property price growth (primary market, year on year) | 0.69% | 0.58% |
| Primary market sales (year on year) | — | −8.43% |
| Developers’ financing from internal funds | — | 73.94% |
| Purchases using mortgages (KPR) | — | 70.68% |
Bank Indonesia’s release gives the second-quarter figure only for price growth.
Why the market is soft
Bank Indonesia’s release does not explain the slowdown, but the wider backdrop is tight. The central bank has kept its policy rate at 5.75% since August and raised its deposit facility rate to 5.00% in October to support the rupiah, while the country’s financial stability committee said pressure rose in October from high energy prices and global interest rates, as we reported in our story on Indonesia’s stability review. At the same time, Bank Indonesia is cutting banks’ reserve requirement in two steps on November 1 and December 1 to add liquidity, which could help mortgage lending.
Our calculation
- Price growth slowed by 0.11 percentage points from the second quarter.
- At 0.58%, new-home prices are rising far more slowly than consumer prices, which rose 3.28% in September and 3.23% in October, so homes are getting cheaper in real terms.
- With more than seven in ten purchases made through mortgages, interest rates have a direct effect on demand.
What it means for India and Asia
Housing is a major driver of construction, cement, steel and household spending in Indonesia, South-East Asia’s largest economy. Falling sales suggest households are cautious despite solid growth, and developers are relying mostly on their own cash rather than bank loans. For Asian investors and suppliers of building materials, the data point to a slower housing cycle in Indonesia until interest rates ease.
What to watch
- Bank Indonesia’s next policy decision and any change to the BI-Rate.
- Mortgage lending after the reserve requirement cuts take effect.
- The fourth-quarter property price survey, due early next year.
A housing estate in Kebumen, Central Java (file photo). Image: SATELITBM, CC BY-SA 4.0, via Wikimedia Commons. Photo source · Licence
Sources
- Bank Indonesia: Survei Harga Properti Residensial Triwulan III 2026 (No. 28/244/DKom), November 6, 2026 (in Indonesian)
- Bank Indonesia: KSSK press release No. 04/KSSK/Pers/2026, November 3, 2026 (in Indonesian)
The Business Desk covers markets, the economy, companies and personal finance. Stories are checked against at least two credible sources before publication.
