Indonesia's Property Sector Breaks Records: 2026 Outlook

As 2026 begins, Indonesia’s property sector is showcasing remarkable growth, driven by monetary easing, fiscal incentives, and business expansion by developers. The property index has surged by 6.82% in a few weeks, surpassing the overall IHSG index increase. Major firms like PT Agung Podomoro Land and PT Sentul City are leading this growth, making the property sector a stock market leader.

Government incentives include a 100% VAT exemption for housing purchases up to 5 billion Rupiahs, alongside subsidies for small and medium enterprises through the KUR Perumahan program. Additionally, lower interest rates are boosting housing credit demand, supporting consumer purchasing power.

However, challenges remain, from slow consumer purchasing power recovery to rising construction material costs and permitting issues. Indonesia’s Real Estate Association emphasizes the need for reform in the permitting processes to drive further growth.

Despite these ups and downs, the property sector retains significant potential, particularly in affordable housing, even as it deals with long-term issues like housing affordability for all.

Analysts remain optimistic about continued growth, especially if both government and industry effectively address ongoing barriers.