Indonesia’s housing market poised for growth amid tax break extension

[JAKARTA] INDONESIA’S housing market is expected to see increased demand by year-end, driven by anticipated interest rate cuts and the extended VAT (value-added tax) exemption for home purchases, encouraging buyers to capitalise on lower prices and reduced mortgage rates.

The landed housing market in Indonesia has showed signs of stability, with residential property sales in the primary market rising 7.3 per cent year on year in the second quarter despite fewer units being launched, according to data from Bank Indonesia.

Vivin Harsanto, head of advisory at JLL Indonesia, said buyers are likely to capitalise on lower home prices, taking advantage of the VAT exemption and reduced mortgage rates, given the strong expectation of interest rate cuts towards the end of the year.