Property Financing Soared 11.4 Percent Throughout May

INDUSTRY.co.id - Jakarta- Total financing for the property sector in Indonesia in May 2018 grew 11.4 percent compared to May 2017 or exceeded Rp840.3 trillion, most of which was supported by property loans of domestic banks, the Central Bank said.

The Assistant Governor of Bank Indonesia's Macroprudential Policy Department Filianingsih Hendarta in Jakarta, Thursday (12/7/2018) said that domestic property credit until May 2018 reached Rp741.7 trillion, and financing sourced from Foreign Debt (ULN) of Rp80.6 trillion and Domestic Securities Rp18 trillion.

"Growth in financing sources in the property sector is showing an upward trend over the past year, driven primarily by growth in property loans originating domestically," he said.

Fili claims the relaxation of the credit value of total collateral (Loan to Value) conducted in August 2016 also has a medium-term effect and sustains the growth of mortgages to date. It also made the Central Bank loosen back the LTV ratio until the total elimination of LTV for the first house of all types on August 1, 2018.

As in May 2018, mortgages lifted 12.75 percent (yoy), or doubled its growth in the past two years when in May 2016, mortgages only grew moderately at 6.21 percent (yoy).

Mortgage also surpassed the average credit growth of banks in May 2018 grew 10.26 percent (yoy).

The highest mortgage growth is channeled for financing of flat / apartment type 22-70 square meters and more than 70 square meters, as well as a type 22-70 square meter tread house and more than 70 square meters.

"The ability to pay from debtors is also still very good, so the KPR can still continue to be lifted in the middle of this year," he said.

The Central Bank projected mortgage growth to grow by 13.46 percent (yoy) by the end of 2018 as the stimulus from LTV exemption for the first house of all types applied as of 1 August 2018