Investing in real estate has always been a popular choice for individuals looking to grow their wealth. The value of real estate assets tends to appreciate over time, with minimal price fluctuations and relatively low risks, making it an attractive investment option for many. In Indonesia, the recent subsidy on home loan interest rates through Minister of Finance Regulation No. 138/2020 has further incentivized both consumers and property developers to engage in the real estate market.
According to the regulation, home loan interest subsidies are provided to banking debtors or financing companies up to type 70. A significant portion of residential property purchases in Indonesia is still financed through home loans. A survey revealed that 75.08% of consumers buy residential properties using home loan facilities, while 16.89% opt for gradual cash payments and 8.04% pay in full upfront.
Market competition plays a crucial role in distributing real estate resources among various users, including individuals, households, businesses, and institutions. The interaction of supply and demand forces determines the prices of properties and who gets access to them. The competition among users in the real estate market revolves around physical locations and spaces, with potential occupants, whether owners or tenants, being the primary participants.
The demand for real estate ultimately stems from the need for convenient access to locations and shelters to accommodate various activities of individuals, companies, and institutions. Financial positions, household and corporate preferences, and needs also influence decisions to own or rent properties. Government policies significantly impact the real estate market and property values through zoning regulations, land development costs, and construction restrictions.
In the Jakarta-Bogor-Depok-Tangerang-Bekasi (Jabodetabek) region, the real estate market tends to exhibit oligopolistic characteristics, with a few major developers dominating the market. Approximately 72% of the total property land in Jabodetabek, equivalent to around 42,000 hectares, is controlled by a select group of developers. This oligopoly situation can lead to pricing agreements that benefit developers at the expense of consumers.
If oligopoly indeed exists in the Indonesian property market, developers may set prices without considering market demand, resulting in consumer exploitation. To address this issue, government intervention may be necessary to break the oligopoly chain by acquiring ownership from developers and setting fair market prices. Implementing time limits on private development projects with large land holdings can also prevent supply manipulation and ensure affordable housing options for consumers.
In conclusion, addressing oligopoly practices in the real estate sector requires proactive measures from the government to maintain a fair and competitive market environment. By implementing regulations that promote transparency, affordability, and market-driven pricing, the real estate market can better serve the needs of both developers and consumers.