2014-2016, Apartment Loan Rates Decreased

Mortgages for flats or apartments between 2014 and 2016 experienced a continuous decline. Data from the Financial Services Authority recorded that credit for these vertical residential units fell by 0.73 percent to Rp 12.9 trillion from the previous year. Similarly, in 2015, apartment mortgages also shrank by 1.66 percent to Rp 13.12 trillion from the previous year.

The interest rate on apartment mortgages in 2014 was 10.82 percent, then rose to 11.56 percent in 2015. However, in 2016, the interest rate on flat ownership decreased in line with the decrease in Bank Indonesia's benchmark interest rate. The sluggish domestic economy, coupled with the fall in global crude oil prices followed by a decline in Indonesia's main commodities, caused a general decrease in public purchasing power.

The government proposed imposing high taxes on vacant or unused apartments. However, this plan was postponed and opposed by property developers due to its poor timing, coinciding with a weak apartment market.