1 million apartments will not solve the city’s housing crisis – Economics

Prabowo resident Subianto wants to build 1 million apartments a year to solve the country’s urban housing shortage, but experts warn the plan could fail if the properties are unaffordable for the middle class.

Jakarta Real Estate Institute (JPI) executive director Wendy Haryanto said adding 1 million apartments a year, from land purchase to construction and occupancy, was feasible, but the real challenge was to ensure that these properties were affordable for Indonesians looking for a home.

“The challenge is making sure these apartments are priced in line with market demand, especially among young middle-class buyers,” she said. Jakarta Post on Wednesday.

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The growing supply of high-rise apartments, especially in Jakarta, remains largely unaffordable, Wendy said, hampering uptake even as demand for urban housing soars.

According to Statistics Indonesia (BPS), the housing backlog stood at 9.9 million units in 2023, with an annual increase of approximately 700,000 to 800,000 units.

Meanwhile, according to real estate consultancy Cushman & Wakefield Indonesia’s third-quarter report, Jakarta’s total apartment supply reached 386,000 units, with an occupancy rate of 64.7 percent, mainly driven by stock in the secondary market.

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