Investment in housing has big economic impact: minister

Investment in housing has big economic impact: minister

A screenshot of Minister of Finance, Sri Mulyani Indrawati, during the opening of the Property Fiesta Virtual Expo 2020 in Jakarta on Thursday. (October 15, 2020). (ANTARA/Aji Cakti)

In accordance with the target of the National Medium Term Development Plan (RPJMN), the contribution of the housing sector to our GDP will increase from 2.9 percent to 4 percent
Jakarta (ANTARA) - Minister of Finance (Menkeu), Sri Mulyani Indrawati, has said any investment into the housing sector has a huge impact on Indonesia’s economy.  

“Household expenditure from this sector will be able to increase GDP (Gross Domestic Product) by 0.6-1.4 percent and can absorb 4.23 million people in the housing sector. This means that any financing made to the housing sector has a very large impact on the economy,” Sri Mulyani said at the opening of the Property Fiesta Virtual Expo 2020 in Jakarta on Thursday.

 

According to the Finance Minister, the housing sector is an important sector and contributes to Indonesia's GDP, and has a significant chain effect and contributes to absorption of labor.

 

Every input in the housing sector related to property has the potential to grow the economy in other sectors: starting from trading, apart from cars and motorbikes; real estate services; trade in cars and motorbikes; and, education, as well as development of other services, she noted.

 

“In accordance with the target of the National Medium Term Development Plan (RPJMN), the contribution of the housing sector to our GDP will increase from 2.9 percent to 4 percent,” Sri Mulyani said.

 

This means that all ecosystems and stakeholders in the housing sector need to be able to move towards increasing added value, she remarked.

 

She also listed several problems facing the housing sector in Indonesia.

 

“The government realizes that living in a healthy house is an important need and right of the community. Based on data from the Ministry of Public Works and Housing (PUPR), the housing backlog has reached more than 7.6 million units in early 2020. Most of it is a need of low-income communities (MBR),” Sri Mulyani remarked.

 

Clearing this backlog is a necessity to fulfill the ideal of one house per household or family. “Regarding this problem, we still see the need for new houses to increase by around 800 thousand units per year,” Sri Mulyani stated.

 

She also said that the problems in the housing sector and settlements in Indonesia are related to affordability, because the purchasing power of the people, especially those from the lower classes, is low so they are unable to buy decent housing.

 

Another obstacle is spatial planning, wherein housing and settlements are moving further away from the city center. Without an adequate infrastructure network, people will certainly feel very burdened living in housing locations that are very far from where they work, the minister said.

 

In terms of urban planning, a widespread spatial plan in the form of an urban sprawl will undoubtedly create a very inefficient ecosystem, including increasing CO2 emissions, she noted.

 

Besides, the problem in the housing construction sector is the problem of building reliability standards, she pointed out. This is not only closely related to the quality of the people living in houses with inadequate building reliability, but also to safety, considering that Indonesia is a disaster-prone country, she said.

 

“From the aspect of feasibility, 41.7 percent of people or households occupy dwellings that only have (met) one aspect of feasibility and some of them even occupy slum settlements,” said Sri Mulyani. (INE)


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