The property industry is increasingly transforming into one of the cornerstone sectors for the national economy in contributing to the multiplier effect, both in terms of forward linkage and backward linkage
Jakarta (ANTARA) - Coordinating Minister for Economic Affairs Airlangga Hartarto gave weightage to the importance of innovation and creativity in the property industry to produce quality, sustainable, and responsible products.

"The property industry is increasingly transforming into one of the cornerstone sectors for the national economy in contributing to the multiplier effect, both in terms of forward linkage and backward linkage," Coordinating Minister Hartarto noted in a statement on Thursday.

Hartarto remarked that the property industry supported other supporting industrial sub-sectors, influenced the development of the financial sector, and absorbed labor significantly.

Related news: Indonesian, Japanese economic ministers discuss trade cooperation

The important role of the property sector is apparent from its contribution to the GDP in the second quarter of 2022 during which it reached 9.14 percent for construction and 2.47 percent for real estate.

In addition, growth was clocked by the property sector in the second quarter of 2022, with achievements exceeding pre-pandemic levels of 2.16 percent (yoy) for real estate and 1.02 percent (yoy) for construction. The growth figure was supported by an increase in the Commercial Property Demand Index in the second quarter of 2022 that was 1.58 percent (yoy).

“The real estate sector experienced positive sales growth of 15.23 percent (yoy) in Q2, driven by improved sales of all types of houses, especially large-type houses, by 29.86 percent (yoy) and small and medium-sized houses, by 14.44 percent (yoy) and 12.25 percent (yoy) (respectively)," he said.


Related news: Have enough rice stocks to last till year end: govt


With this significant impact, the government has offered support through various policies, such as by providing Loan to Value (LTV) and Financing to Value (FTV) up to a maximum of 100 percent for property loans, for banks that meet the requirements of the ratio of non-performing loan/non performing financing.

In addition, the government has imposed an extension of the VAT incentive of a maximum of 50 percent for houses or units, with a maximum selling price of Rp2 billion, and 25 percent for houses or units, with a selling price of above Rp2 billion to Rp5 billion until September 2022.

Furthermore, Coordinating Minister Airlangga said that several policies initiated by the government should be supported by various parties through collaboration and innovation to overcome various challenges ranging from global geopolitical conflicts, supply chain disruptions, energy crises, risk of stagflation, and normalization of interest rates in developed countries to changes in climate.


Related news: Widodo seeks completion of all national projects before 2024

Related news: Voice of developing countries in G20 should be increased: Minister

Translator: Kuntum K, Azis Kurmala
Editor: Fardah Assegaf
Copyright © ANTARA 2022