Indonesian Property Developers not Happy with New Down Payment Rules
After the central bank of Indonesia placed stricter rules on mortgages for buying property, Indonesian property developers, as well as the Indonesian Real Estate Association (REI), have criticized the new framework as it will impact on demand for property. The central bank implemented new loan-to-value ratios amid concerns that a property bubble may arise. According to the bank, many buyers of apartments are speculators who benefit from sharply rising property prices.
However, property developers, including the Agung Podomoro Group, claim that more than 80 percent of their buyers are in fact end-users, not speculators.
Starting from 1 September 2013, minimum down payments for the purchase of a second and third house or apartment in Indonesia will be raised:
| Specification | Minimum Down Payment |
| • Second property larger than 70m² | 40 percent of the price |
| • Third property larger than 70m² | 50 percent of the price |
| • Second property between 22 to 70m² | 30 percent of the price |
| • Third property between 22 to 70m² | 40 percent of the price |
Source: Bank Indonesia
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