What happened
Indonesia's subsidised housing programme is running well behind plan in 2026. By early October, FLPP, the state-backed low-interest mortgage scheme for lower-income citizens, had financed 166,938 homes. That is 47.69% of the 350,000-unit annual target, with less than three months of the year left.
detikProperti reported the figures on October 8 and asked whether Gen Z buyers have simply lost interest in owning a home. The experts it spoke to said the answer is more complicated.
Colliers: affordability and banks
Ferry Salanto, head of research at Colliers Indonesia, said the main barriers are affordability and bankability, meaning whether a borrower passes a lender's credit checks. He spoke at a Colliers media briefing on third-quarter 2026 results on October 7.
Everyone wants a home, Salanto said, but getting into the housing market is becoming harder and heavier.
Buyers have to cover far more than the price. They need a down payment, transaction costs and a monthly instalment they can sustain. Many young people are early in their careers, and their pay has not kept up with living costs.
Credit records are another hurdle, he said. Some applicants carry consumer loans or debts to online lenders, known locally as pinjol, which makes it harder to qualify for a KPR, the Indonesian home loan.
Salanto agreed that many young people spend on holidays and shopping, but said that does not mean they have given up on owning a home. They need to adjust priorities, because buying a house is a much larger and longer financial commitment.
Developers: the problem is demand
Ari Tri Priyono, chairman of Himperra, an association of public housing developers, told detikcom on October 3 that the sales slump is worse than during the COVID-19 pandemic. Supply is not the issue, he said. Developers can build as much as needed, but buyers are short of spending power.
He said fewer young people now aim to buy a home early, preferring to spend on daily needs or travel. Others are held back by debts recorded in SLIK OJK, the credit reporting system run by the financial regulator.
OJK has already said that arrears below Rp 1 million should no longer count against borrowers. Priyono said banks remain cautious, and there has been no significant change in sales since the rule took effect.
Trouble for existing borrowers
Problems extend to people who already have mortgages. detikProperti reports that some buyers stop paying, hand their loans over to others or quietly sell the house while instalments are still running.
Reasons vary. Some cannot keep up with repayments. Others decide to move back to their home villages and drop the loan.
What it means for Bali
FLPP covers low-cost housing for Indonesian citizens. Foreigners do not take part, and the scheme has no direct effect on Bali's villa market, where deals with foreign buyers usually happen without local mortgages.
The story is still a useful read on domestic demand. Experts point to weak spending power and cautious banks, and the OJK easing on small arrears has had no visible effect so far.
There is a second point. Indonesian developers say supply is not the constraint and buyers with the means to pay are.