By Sasmaya Tuhuleley
As the economy of Indonesia still depends on bank loans, the robust bank lending can help economy to expand. Bankers are optimistic that bank loan outstanding will grow at least 25% compared to only about 22% last year, that will help the economy to expand 6,4-6,8%. This optimism is based on the prediction that Bank Indonesia’s benchmark interest rate (BI rate) will continue to drop from its current level of 8% to around 7%. The down trend of BI rate will give banks more room to cut their lending rates.
The growth of property loan outstanding this year is expected to exceed 30%, following the trend of last year’s growth around 29%. Construction loans will lead the growth because of increasing activities in office, retail and residential property development. The demand of office and retail as well as both landed and vertical houses will encourage developers to expand their business. Consequently they need more loans from banks.
The growth of construction loan outstanding will be followed by mortgage loan outstanding. If last year, mortgage outstanding was expanded 29%, this year its growth is predicted to exceed 30%. Aside from the increasing supply of new landed houses and condominium units, the strong demand of mortgage loans is also supported by the down trend of mortgage interest rate and the improvement of people purchasing power.
Although property sector is very promising this year due to mounting bank loans, but attention should be given to several big issues in the vein of:
Firstly, the issue of oil price hike that can hit global economy including Indonesia’s economy very badly. The optimism about economic prospect this year including property sector will be irrelevant to be talked to if oil price continue to break its record after achieving a new record of US$ 100 per barrel last month.
Secondly, the issue of non performing or problem loans that will spark off drawback to the economy due to over lending in property sector. Many people believe that the 1997’s Asian crisis is owing to escalating property loans. As we know many banks in Asian countries like Thailand, Malaysia, and Indonesia had lent a lot of money to finance property projects at that time hoping that the region’s economic fortune would not come to the end. However, as the crisis hit the region, problem loans arose putting many banks into liquidity crunch.
Thirdly, the issue of maturity mismatch especially in mortgage loans that may result in liquidity problem to banks. As we know, banks in Indonesia can not source long term funds from capital market to finance their mortgage lending due to the lack of secondary mortgage market infrastructures. While lenders in many Asian countries like Malaysia, Hong Kong, India or
Thailand gain access to low cost and long term funds from capital market, banks in Indonesia can not. While for instance home buyers can enjoy as low as 7% interest rate mortgages in Thailand and 6% in Malaysia with 30 years tenor, the average mortgage interest rate in Indonesia is still as high as 12% with average 10 years tenor.
Home works
Indonesia is a country with huge population. Therefore the opportunity to develop property market is very promising in the long run. However, Indonesia needs to do its home works first. Problems regarding property taxation, land deed, building permit, or infrastructure and utility development need be addressed soon.
The government of Indonesia also needs to facilitate secondary mortgage market development to help banks and other mortgage lenders mobilizing long term funds from capital market. Although, PT. Sarana Multigriya Finansial (Persero) or PT. SMF has been established as a ‘conduit’ for mortgage securitization process in Indonesia since 2005, but until now this company can not function as expected. The company’s plan to close the IDR 500 billion mortgage securitization transaction in Indonesia involving Bank BTN as an originator last year could not be done. Therefore, the government needs to find solution in helping the company to develop secondary mortgage market.
Real Estate Investment Trusts (REITs) have been successesfully introduced in Japan, Hong Kong, Malaysia and Singapore. REITs are an attractive high-yield capital market instrument to finance property development in Asia. Considering economic growth, urbanization, increasing affluences, and the growth of middle classes that need mounting funds to finance infrastructure and property development, Indonesia needs to follow suit.
Indonesia has been long opening its economy to global investors. But not like in many other countries, property market here still relatively close to foreign investors. Indonesian can buy property in neighborhood countries like Australia, Singapore or Malaysia, but people from those countries can not buy property here. In effect, Indonesia continue to suffer from capital out flow for the benefit of other countries.
Recently, the government of Malaysia has relaxed rules for foreign ownership of private residential property. With this new rule, foreigners can buy condominium unit worth minimum RM 250,000 or US$ 68,535 in that country. Singapore has also allowed foreign ownership of private residential property up 100 years. But in Indonesia, government still imposes restrictions on foreign ownership of property. The government only allows foreigners to lease property up to 25 years. Because of this restriction, developers can not sell their residential property projects like condominium units to foreigners.
Parliament and Indonesia Real Estate Association (REI) has asked government to relax its rule on foreign ownership of private residential property. Enggartiasto Lukita from parliament has specifically imposed government to amend the Main Law of Agrarian 1960. The Law according to him is no longer good for the development of the country. Everybody will wait for the government and parliament to amend this Law.
Indonesia is a big country with big opportunities. Nobody is doubt about that fact. This year could be a year of hope for property to expand beyond everybody’s expectation, as long as the country considerably do its home works.
Catatan : Kolom ini pernah dimuat di Majalah Asian Property Investment
As the economy of Indonesia still depends on bank loans, the robust bank lending can help economy to expand. Bankers are optimistic that bank loan outstanding will grow at least 25% compared to only about 22% last year, that will help the economy to expand 6,4-6,8%. This optimism is based on the prediction that Bank Indonesia’s benchmark interest rate (BI rate) will continue to drop from its current level of 8% to around 7%. The down trend of BI rate will give banks more room to cut their lending rates.
The growth of property loan outstanding this year is expected to exceed 30%, following the trend of last year’s growth around 29%. Construction loans will lead the growth because of increasing activities in office, retail and residential property development. The demand of office and retail as well as both landed and vertical houses will encourage developers to expand their business. Consequently they need more loans from banks.
The growth of construction loan outstanding will be followed by mortgage loan outstanding. If last year, mortgage outstanding was expanded 29%, this year its growth is predicted to exceed 30%. Aside from the increasing supply of new landed houses and condominium units, the strong demand of mortgage loans is also supported by the down trend of mortgage interest rate and the improvement of people purchasing power.
Although property sector is very promising this year due to mounting bank loans, but attention should be given to several big issues in the vein of:
Firstly, the issue of oil price hike that can hit global economy including Indonesia’s economy very badly. The optimism about economic prospect this year including property sector will be irrelevant to be talked to if oil price continue to break its record after achieving a new record of US$ 100 per barrel last month.
Secondly, the issue of non performing or problem loans that will spark off drawback to the economy due to over lending in property sector. Many people believe that the 1997’s Asian crisis is owing to escalating property loans. As we know many banks in Asian countries like Thailand, Malaysia, and Indonesia had lent a lot of money to finance property projects at that time hoping that the region’s economic fortune would not come to the end. However, as the crisis hit the region, problem loans arose putting many banks into liquidity crunch.
Thirdly, the issue of maturity mismatch especially in mortgage loans that may result in liquidity problem to banks. As we know, banks in Indonesia can not source long term funds from capital market to finance their mortgage lending due to the lack of secondary mortgage market infrastructures. While lenders in many Asian countries like Malaysia, Hong Kong, India or
Thailand gain access to low cost and long term funds from capital market, banks in Indonesia can not. While for instance home buyers can enjoy as low as 7% interest rate mortgages in Thailand and 6% in Malaysia with 30 years tenor, the average mortgage interest rate in Indonesia is still as high as 12% with average 10 years tenor.
Home works
Indonesia is a country with huge population. Therefore the opportunity to develop property market is very promising in the long run. However, Indonesia needs to do its home works first. Problems regarding property taxation, land deed, building permit, or infrastructure and utility development need be addressed soon.
The government of Indonesia also needs to facilitate secondary mortgage market development to help banks and other mortgage lenders mobilizing long term funds from capital market. Although, PT. Sarana Multigriya Finansial (Persero) or PT. SMF has been established as a ‘conduit’ for mortgage securitization process in Indonesia since 2005, but until now this company can not function as expected. The company’s plan to close the IDR 500 billion mortgage securitization transaction in Indonesia involving Bank BTN as an originator last year could not be done. Therefore, the government needs to find solution in helping the company to develop secondary mortgage market.
Real Estate Investment Trusts (REITs) have been successesfully introduced in Japan, Hong Kong, Malaysia and Singapore. REITs are an attractive high-yield capital market instrument to finance property development in Asia. Considering economic growth, urbanization, increasing affluences, and the growth of middle classes that need mounting funds to finance infrastructure and property development, Indonesia needs to follow suit.
Indonesia has been long opening its economy to global investors. But not like in many other countries, property market here still relatively close to foreign investors. Indonesian can buy property in neighborhood countries like Australia, Singapore or Malaysia, but people from those countries can not buy property here. In effect, Indonesia continue to suffer from capital out flow for the benefit of other countries.
Recently, the government of Malaysia has relaxed rules for foreign ownership of private residential property. With this new rule, foreigners can buy condominium unit worth minimum RM 250,000 or US$ 68,535 in that country. Singapore has also allowed foreign ownership of private residential property up 100 years. But in Indonesia, government still imposes restrictions on foreign ownership of property. The government only allows foreigners to lease property up to 25 years. Because of this restriction, developers can not sell their residential property projects like condominium units to foreigners.
Parliament and Indonesia Real Estate Association (REI) has asked government to relax its rule on foreign ownership of private residential property. Enggartiasto Lukita from parliament has specifically imposed government to amend the Main Law of Agrarian 1960. The Law according to him is no longer good for the development of the country. Everybody will wait for the government and parliament to amend this Law.
Indonesia is a big country with big opportunities. Nobody is doubt about that fact. This year could be a year of hope for property to expand beyond everybody’s expectation, as long as the country considerably do its home works.
Catatan : Kolom ini pernah dimuat di Majalah Asian Property Investment
1 komentar:
Saya telah berpikir bahwa semua perusahaan pinjaman online curang sampai saya bertemu dengan perusahaan pinjaman Suzan yang meminjamkan uang tanpa membayar lebih dulu.
Nama saya Amisha, saya ingin menggunakan media ini untuk memperingatkan orang-orang yang mencari pinjaman internet di Asia dan di seluruh dunia untuk berhati-hati, karena mereka menipu dan meminjamkan pinjaman palsu di internet.
Saya ingin membagikan kesaksian saya tentang bagaimana seorang teman membawa saya ke pemberi pinjaman asli, setelah itu saya scammed oleh beberapa kreditor di internet. Saya hampir kehilangan harapan sampai saya bertemu kreditur terpercaya ini bernama perusahaan Suzan investment. Perusahaan suzan meminjamkan pinjaman tanpa jaminan sebesar 600 juta rupiah (Rp600.000.000) dalam waktu kurang dari 48 jam tanpa tekanan.
Saya sangat terkejut dan senang menerima pinjaman saya. Saya berjanji bahwa saya akan berbagi kabar baik sehingga orang bisa mendapatkan pinjaman mudah tanpa stres. Jadi jika Anda memerlukan pinjaman, hubungi mereka melalui email: (Suzaninvestment@gmail.com) Anda tidak akan kecewa mendapatkan pinjaman jika memenuhi persyaratan.
Anda juga bisa menghubungi saya: (Ammisha1213@gmail.com) jika Anda memerlukan bantuan atau informasi lebih lanjut
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