Average monthly interest rate of house loans Indonesia 2020-H1 2023

As of May 2023, the average monthly interest rate for house loans in Indonesia was 7.46 percent. The country's house loan interest rate has gradually decreased over the past few years, with a drop of around 1.26 percent compared to the rate in January 2020.

House financing and ownership in Indonesia

With mortgage interest rates anticipated to remain lower compared to the pre-COVID-19 pandemic level, Indonesia's residential property market is expected to continue growing. Indonesian banks provided mortgage loans exceeding 500 trillion Indonesian rupiah monthly between January 2022 and May 2023, catering to the majority of Indonesians who rely on loans to finance their homeownership needs. Notably, house ownership rates in Indonesian rural areas are significantly higher compared to urban areas. Amid its soaring land and house prices, Jakarta struggled with the lowest house ownership rate of any province in Indonesia.

Housing prices

Despite its significant housing backlog that underscores the need for affordable housing, Indonesia's residential property price index has steadily increased in recent years. Cities like Batam, Pontianak, Bandar Lampung, and Greater Jakarta have seen the highest increases in property prices. With Indonesia's plan to relocate its capital to East Kalimantan, the property market in this province and its surrounding regions is also poised for increased investment opportunities.