Sluggish Home Sales Signal Weak Demand as Prices Stabilize: BI Survey
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JAKARTA, Investortrust.id — Residential property sales in Indonesia’s primary market contracted in the second quarter of 2025, suggesting weakened demand even as prices remained largely stagnant, Bank Indonesia reported.
According to the central bank’s latest Residential Property Price Survey, total home sales dropped by 3.80% year-on-year, reversing a slight 0.73% increase in the previous quarter. The decline was driven by a contraction in mid- and large-sized housing segments and a slowdown in demand for smaller units.
Bank Indonesia’s Head of Communications Department, Ramdan Denny Prakoso, noted that price growth also softened, reflecting the cooling market. The Residential Property Price Index (IHPR) rose by 0.90% year-on-year in Q2, slightly below the 1.07% growth recorded in Q1.
“Price growth slowed in Q2 as sales of small houses in th eprimary market decelerated, while medium and large houses experienced outright contraction,” the central bank noted in the report published on Wednesday, Aug. 6, 2025.
A photo accompanying the report features a housing development by Lippo Karawaci, highlighting ongoing projects despite declining buyer appetite.
The weakening sales and soft price growth indicate that the market may have little room for further price increases. Developers are facing a buyer pool that appears increasingly cautious, likely due to affordability concerns and tighter financing conditions.
In terms of project funding, the survey showed that developers remain heavily dependent on internal capital, which accounted for 78.36% of total funding in the second quarter.
On the consumer side, mortgage loans continued to dominate the purchasing method in the primary market. BI reported that 73.06% of all home sales were financed through credit, underlining the importance of accessible housing loans to sustain demand.
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