Minister: The Importance of Innovation and Creativity in The Property Industry

Antara News are reporting that Airlangga Hartarto, the Coordinating Minister for Economic Affairs has spoken out on the importance of innovation and creativity in the property industry in order to produce quality, sustainable, and responsible products.

“The property industry is increasingly transforming into one of the cornerstone sectors for the national economy in contributing to the multiplier effect, both in terms of forward linkage and backward linkage,” Coordinating Minister Airlangga said.

He also noted that the property industry supported other supporting industrial sub-sectors, influenced the development of the financial sector, and absorbed labour significantly.

The important role of the property sector is apparent from its contribution to GDP in Q2 of 2022 where it reached 9.14-percent for construction and 2.47-percent for real estate claim Antara News.

In addition, growth was clocked by the property sector in the Q2 of 2022, with achievements exceeding pre-pandemic levels of 2.16-percent (YoY) for real estate and 1.02-percent (YoY) for construction. The growth figure was supported by an increase in the Commercial Property Demand Index in Q2 of 2022 that was 1.58-percent (YoY).

“The real estate sector experienced positive sales growth of 15.23-percent (YoY) in Q2, driven by improved sales of all types of houses, especially large-type houses, by 29.86-percent (YoY) and small and medium-sized houses, by 14.44-percent (YoY) and 12.25-percent (YoY) respectively,” he said.

With this significant impact, the government has offered support through various policies, such as Loan to Value (LTV) and Financing to Value (FTV) up to a maximum of 100-percent for property loans, for banks that meet the requirements of the ratio of non-performing loan/ non performing financing.

In addition, the government has imposed an extension of the VAT incentive of a maximum of 50-percent for houses or units, with a maximum selling price of IDR 2-billion, and 25-percent for houses or units, with a selling price of above IDR 2 billion to IDR 5 billion until September 2022.

Coordinating Minister Airlangga said that several policies initiated by the government should be supported by various parties through collaboration and innovation to overcome various challenges ranging from global geopolitical conflicts, supply chain disruptions, energy crises, risk of stagflation, and normalization of interest rates in developed countries to changes in climate.

Source: Antara News

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