Property Industry Projected to Rebound in 2026, Housing Task Force Says Toughest Phase Is Over
Signs of a recovery in Indonesia’s national property industry are becoming increasingly evident, in line with improving economic conditions since late 2025. The Housing Task Force (Satgas Perumahan) believes that 2026 could mark a turning point after the sector endured its longest slowdown in the past decade.
Housing Task Force member Panangian Simanungkalit said the economic recovery in the fourth quarter of 2025 has laid a crucial foundation for the revival of the property industry. This momentum is expected to accelerate the implementation of the Three Million Homes Program initiated by President Prabowo Subianto and Vice President Gibran Rakabuming Raka.
Between 2014 and 2024, Indonesia’s economic growth averaged around 4 percent, weighed down by various factors, including the impact of the Covid-19 pandemic. However, conditions began to reverse toward the end of 2025, as economic growth in the fourth quarter reached 5.45 percent, up from 5.04 percent in the previous quarter.
This improvement is widely seen as an indication that the national economy has passed its lowest point. Going forward, the government’s main challenge will be maintaining stability and sustaining growth momentum so that the positive trend continues throughout 2026.
The government projects economic growth in 2026 to be around 5.4 percent, while Bank Indonesia forecasts growth in the range of 5.1 to 5.6 percent. These projections are expected to have a significant impact on the property sector.
Based on the concept of growth elasticity, property industry growth typically ranges between 1.5 and 1.7 times the pace of overall economic growth. Assuming economic growth of approximately 5.2 percent, the property sector could expand by up to 8 percent, or even approach 10 percent.
Historically, property market recoveries have often been followed by periods of rapid growth. A similar pattern was observed between 2009 and 2012, when the property sector emerged as one of the public’s primary investment choices in the aftermath of the global financial crisis.
In addition to economic factors, the recovery of the property sector is being supported by government policies, including a downward trend in interest rates and the extension of a 100 percent government-borne value-added tax (VAT) incentive. These measures are considered crucial in maintaining purchasing power and stimulating property market activity.
The Housing Task Force emphasized that intensive dialogue between the government and property industry players will be key to ensuring that the recovery momentum continues and develops into a stronger growth phase in 2026.
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