News - 25 June 2018

Bank Indonesia to help boost property business

Bank Indonesia Governor Perry Warjiyo (Antara/Sigid Kurniawan)

Bank Indonesia (BI) Governor Perry Warjiyo has said the central bank will introduce loan to value (LTV) relaxation and other policies to help boost the property business during BI's board of governors meeting on Wednesday and Thursday.

Perry has not elaborated on the financing policy for the property sector, but has said the policy aims to help millennials purchase homes and to lure investors.

He stressed that two types of buyers – first time buyers and investment buyers – could help boost the property business.

“Our data shows that the potential buyers of both apartments and houses are those aged between 36 and 45 years old. Our policy encourages first time buyers,” he said as quoted by kompas.com. “In regard to the details, we will discuss them in the board of governors meeting.”

In 2016, the central bank issued Bank Indonesia Regulation No. 18/16/PBI/2016 on LTR for property financing and down payments for vehicle financing.

Under the regulation, a down payment at general banks had been set at 15 percent for first time buyers.

Meanwhile, for second time buyers, a down payment had been set at 20 and 25 percent, depending on home size. (bbn)

The Jakarta Post