Medan, N Sumatra (ANTARA News) - The North Sumatra chapter of the Real Estate Indonesia (REI) said that the extension of mortgage period to 25 years would able to accelerate home ownership in the country.

"The longer loan period of up to 25 years could help people buy houses because the current large monthly installment has so far been blamed as one of the barriers hindering house purchases," head of the REI chapter, Tomi Wistan, here Saturday.

Therefore the association hopes the mortgage policy of Bank Tabungan Negara (BTN) could be followed by other banks.

Tomi said that efforts to increase home ownership should be done because there are still many people who do not own a house, while housing is one of the main needs of the community.

Acceleration of home ownership is expected to be boosted by the policy especially after Bank Indonesia`s recent policy requiring down payment of 30 percent has made people`s purchasing power to be slightly weakened.

Tomi said that until today, most consumers use a home ownership credit system.

"Besides extending mortgage period, banks are also expected to maintain the interest rates low and create showcases providing a variety of attractive offers to potential customers," he said.

Tomi said that this year`s North Sumatra`s properties growth is projected to reach only about 20 percent because of the unfavorable situation.

The unfavorable conditions include a rise in the basic electricity tariff (TDL), a wage increase and upcoming North Sumatra Governor`s election and the next General Elections in 2014.

Despite the challenges including the rise of the house price by 20 percent, REI has estimated that demand growth of about 20 per cent would be accomplished.

Manager of Medan branch of Bank BTN Muhammad Ikhwan Nasution previously said that the bank continued to make innovations in an effort to improve mortgage distribution.

He said the extension to 25 years of the mortgage period and various promotions including on free banking administrative costs for purchase made during the exhibition was expected to be able to increase the potential customers` interest in buying a house.


Editor: Jafar M Sidik
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