Indonesia’s Primary Housing Market Inches Forward as Sales Contract at a Milder Pace

JAKARTA, Investortrust.id — Indonesia’s primary residential real estate market recorded modest price gains during the second quarter of 2026, alongside a sharp recovery in sales volume as homebuyer demand began to stabilize.

The central bank's Residential Property Price Survey (SHPR) revealed Friday that the Residential Property Price Index (IHPR) reached 110.89 in the second quarter, representing a 0.69% year-on-year increase. The reading reflects a slight acceleration from the 0.62% growth registered in the first quarter.

The gradual firming of primary housing prices and the dramatic narrowing of sales contractions highlight underlying resilience in Southeast Asia's largest consumer market. With end-user home purchases heavily reliant on bank credit, the sector's performance serves as a key barometer for household balance sheets, consumer confidence, and broader domestic credit growth.

Large-Tized Homes Drive Year-on-Year Growth

The modest annual price uptick was largely propelled by large-sized residential units. The index for large homes rose to 108.41, up 0.68% year-on-year compared to 0.50% in the preceding quarter.

Conversely, price appreciation for small-sized homes moderated to 0.49% year-on-year (index level 113.89), down from 0.61% in the first quarter. Medium-sized homes posted an index reading of 114.01, maintaining a stable trajectory relative to the previous period.

Across 18 major cities surveyed by Bank Indonesia, 10 municipalities registered stronger annual price growth, seven recorded decelerations, and one remained unchanged. Banjarmasin logged a notable acceleration to 1,29% year-on-year from 0.52%, while Pekanbaru rebounded sharply to 3.23% growth following a 0.03% contraction in the first quarter. On the flip side, price growth slowed in Padang and Balikpapan to 0.63% and 1.19%, respectively.

Sales Rebound as Quarterly Momentum Builds

On a sequential basis, primary property prices expanded 0.26% quarter-on-quarter, picking up pace from the 0.04% gain seen in the first quarter. Quarter-on-quarter momentum was led by medium-sized homes, which grew 0.40% after shrinking 0.01% in the prior period. Large home prices rose 0.26% quarter-on-quarter, whereas small home prices dipped 0.02%.

Metropolitan regions drove the quarter-on-quarter expansion, led by Pekanbaru and the Greater Jakarta-Bogor-Depok-Tangerang-Bekasi (Jabodebek)-Banten corridor, which grew 3.26% and 0.23% quarter-on-quarter, respectively.

Turnaround dynamics were most pronounced in transactional volumes. Total primary residential sales narrowed their year-on-year contraction to just 2.36% in the second quarter, representing a substantial improvement from the steep 25.67% drop recorded in the first quarter. Sales of small and large housing units drove the rebound, while medium-sized home sales remained subdued.

Developers Rely on Internal Cash; Buyers Turn to Mortgages

Financing structures across the sector remained distinct between supply and demand sides. Property developers continued to rely predominantly on internal corporate funds, which covered 73.28% of total project development expenditure.

For homebuyers purchasing primary residential properties, mortgage financing remained the dominant payment channel, accounting for a 70.05% share of total consumer transactions.