Indonesia’s affordable housing sector is receiving unprecedented attention from both government and private developers, with ProSpace Indonesia’s Residential Property Report identifying 127,000 affordable units under construction in 2024, a 32% increase from the previous year. However, the annual demand-supply gap remains substantial at approximately 700,000 units.
The government’s One Million Houses program achieved 78% of its target in 2024, delivering 780,000 housing units across various affordability segments. Meanwhile, private developers are increasingly entering affordable segments through partnerships with state-owned enterprises and innovative financing mechanisms.
“The affordable housing ecosystem is strengthening through policy support, financing innovations, and construction efficiency improvements,” notes Dewi Susanto, Housing Policy Specialist at ProSpace. “Vertical housing solutions in urban areas and standardized designs in peri-urban locations are proving particularly effective in addressing the backlog.”
Mortgage subsidy programs remain crucial for affordability, with interest rate subsidies and down payment assistance enabling approximately 320,000 first-time homebuyers in 2024. Digital mortgage platforms have streamlined application processes, reducing approval times by an average of 47%.
Modular construction techniques and standardized designs are increasingly utilized, reducing construction costs by up to 23% compared to traditional methods while maintaining quality standards. Meanwhile, micro-housing concepts with efficient 25-40 square meter units gain acceptance in major urban centers.
Land availability near employment centers remains the primary challenge, with transit-oriented development policies attempting to balance affordability with accessibility through integrated transportation planning.
For affordable housing development information: Phone: +62 21 5799 8989 Email: info@prospaceindonesia.com Follow @prospace.indonesia on Instagram for updates