Developers eye low-cost apartments, houses

The Jakarta Post, Jakarta | Mon, 05/05/2008 11:25 AM

The Indonesian real estate association (REI) is to construct 86 subsidized low-cost apartment towers, with 600 units per tower, and 120,000 low-cost houses this year for low-income households.

"We have already built around 40,000 apartments in 61 apartment towers throughout Jakarta. State-owned Bank Tabungan Negara (BTN) has financed 3,000 units," said Alwi Bagir Mulachela, REI general secretary, Saturday.

David Lelij, sales manager of PT Tiara Metropolitan Jaya, subsidiary of major property developer Agung Podomoro Group, said members of the association were committed to providing such facilities at fairly affordable rates.

"We want to provide low-income earners an affordable place to live in the heart of the city," he said at the Real Estate Indonesia Expo 2008 opening.

David said Agung Podomoro were constructing 6,000 units of subsidized low-cost apartments in Kalibata, South Jakarta.

"Demand for low-cost houses is increasing," he said. 

David welcomed high-income earners to invest in the low-cost apartments. 

"But buyers who earn more than Rp 4.5 million (US$488) per month will not be eligible for the government subsidy and they will have to pay the tax as well." 

Under the scheme, the government will subsidize buyers earning less than Rp 4.5 million per month by paying 3 to 9 percent of their interest during a period of up to eight years. The 10 percent tax on units worth a maximum of Rp 144 million ($15,616) will be lifted. 

For houses, the government will provide a subsidy of Rp 7.5 million, Rp 10 million and Rp 12.5 million, depending on buyers' income levels. 

The government is aiming to have 1,000 low-cost apartments built by 2011 throughout the country and at least 1.35 million low-cost houses during the 2004-2009 period to accommodate the needs of low-income earners. 

The government supports developers by simplifying permit requirements to develop low-cost houses and apartments. 

Besides Agung Podomoro Group, Gapura Prima Group, Artha Graha Group and Bakrieland Development are also taking part in the program. (rff)