Law Likely To Expand Market: Analysts
Tifa Asrianti. The Jakarta Post, Jakarta - 31/01/2011
Real estate analysts predict the urban housing sector would expand following a recent revision to the housing law that gave home buyers — including those from low-income backgrounds — greater access to financing.
The analysts, however, were quick to add that the formulation of a solid government regulation supporting the law was important for the market expansion.
“This law paves the way for easier financing for Indonesians,” Jones Lang LaSalle Indonesia research chief Anton Sitorus said recently.
Dwi Novita Yeni from Coldwell Banker Property Indonesia said the law also gave more access to low-income families to own houses due to regulations on affordable housing financing schemes. The law, which consists of 18 chapters and 167 articles, was passed last December.
Article 118 of the law mandates that the government and local administrations provide housing finance schemes to fulfil housing needs. Article 119 says financing schemes could be funded by national and regional budgets.
The law also states that the government could appoint an institution to manage the housing scheme to ensure access to sustainable and affordable housing for all citizens.
Another article regulates a fair share of responsibility on housing development between the central government and local administrations.
Dwi said the law would help both property businesses and people as it contained articles regulating residential development, the responsibility of the central government and local administrations, as well as financing issues. “I think the new law will also support the middle- or lower-income families,” she said.
Dwi added that since not all property developers were interested in the low-cost housing business, local administrations could work with developers to provide such housing.
Anton, however, claimed there was no significant breakthrough on regulations of foreign ownership. The law still limits foreigners to using or renting houses in Indonesia.
Anton said the government should entertain the possibility of foreigners owning property in Indonesia.
Foreign interest in Indonesia’s property market was relatively high because prices were lower compared to neighboring countries such as Singapore, he went on.
He said there were between 80,000 and 90,000 expatriates living in Indonesia, not including foreign tourists who regularly visited Indonesia or had interest in property ownership in Indonesia.
A coalition of housing and urban poverty NGOs lambasted the revised law, saying it discriminated against the poor.
The law prohibits building settlements on areas not designated for housing. The law would therefore affect thousands of the urban poor who live along riverbanks and railroads, among others. The law sets a maximum punishment of five years imprisonment for violations.