The property industry stands out as one of the key drivers of Indonesia's economic growth, contributing significantly to the GDP. In the second quarter of 2023, it recorded growth of 9.43% for the construction sector and 2.40% for the real estate sector. Although the real estate sector showed a 12.30% year-on-year decline in the second quarter of 2023, sales of large-sized houses saw a notable increase of 15.11% year-on-year. On the demand side, the Commercial Property Demand Index for lease grew by 5.87% year-on-year, while the Commercial Property Demand Index for sales increased by 0.36% year-on-year in the second quarter of 2023. To stimulate increased demand and investment in the property sector, the government has introduced various policies such as a 100% Loan to Value and Financing to Value for property loans, which are valid until December 31, 2023 as stated by the Coordinating Minister for Economic Affairs.
Under the theme "Green Cities for a Greener Future," the property industry also recognizes that sustainable development in the context of eco-friendly cities is crucial to maintaining a balance between economic growth and environmental protection. An excellent example of this concept in action is the development of the National Capital Integrated Coastal Development (NCICD) project, which aims to create a green city. To achieve energy efficiency and conservation, the use of environmentally friendly building designs (green buildings) is crucial, utilizing a closed-loop water management system and district cooling. The government's support for the green development concept has been demonstrated through Government Regulation No. 16 of 2021 concerning Building Structure, which includes provisions for issuing environmentally friendly building certificates. The government has also enacted Law No. 11 of 2020 concerning Job Creation, aimed at improving the investment climate in Indonesia, including in the property sector, which plays a pivotal role with significant multiplier effects on approximately 174 property-related supporting industries, such as construction, labor, and building materials.
