On 7 August 2026, Bank Indonesia released its Residential Property Price Survey for the second quarter of the year. Most coverage pulled two numbers out of it: prices up slightly, sales recovering. A third number in the same release went almost entirely unquoted, and it is the one that matters most to anyone weighing a house that has not been built yet.
Surveyed developers reported that 73.28 percent of their total construction funding requirement came from internal company funds rather than bank construction credit.
Why a funding-mix figure lands on the buyer's side of the table
A construction loan carries a feature that quietly benefits buyers: the money is approved up front, released in tranches against verified physical progress, and the lender has its own reason to see the building finished. A third party is watching the site.
When most of the build is funded from the developer's own cash instead, that supervisor is absent. Whether the next block goes up in October depends on what the company's cash position looks like in October. Slow sales, slow cash, slow construction.
The same survey recorded primary-market residential sales in the second quarter of 2026 still contracting 2.36 percent year on year. That is a sharp improvement on the 25.67 percent contraction of the previous quarter, but it remains negative territory. The cash engine is recovering rather than running hot.
Three quarters of what it costs to build your house is carried on the developer's balance sheet, in a quarter when primary sales are still negative. That is not a scandal, it is how the sector is structured. What the structure does is place schedule risk on the person buying a unit that is not yet standing.
Input costs have been moving several times faster than selling prices
The Indonesian Contractors Association reports overall construction cost escalation reaching as high as 35 percent. Its chairman, Djoko Sarwono, has said pressure on the sector grew more complex in recent months as energy prices fed through.
Figures cited by the association for 28 February to 1 July 2026:
| Input | Increase, 28 Feb - 1 Jul 2026 |
|---|---|
| Industrial diesel | 41.52 percent |
| World oil | 37.41 percent |
| Rebar | 27.78 percent |
| Asphalt | 23.85 percent |
Set that against the selling side. Bank Indonesia's Residential Property Price Index grew 0.69 percent year on year in the second quarter of 2026, up from 0.62 percent in the first. Four months of double-digit input increases against a year of sub-one-percent price growth.
That gap does not evaporate. For now it sits on developer and contractor balance sheets. The contractors association has said at least 20 of its member companies are in critical condition because project cost increases were not matched by contract value adjustments.
On how much of a house price is construction, industry figures put cement and steel alone at roughly 30 percent of total build cost, with materials accounting for 20 to 30 percent of total cost on landed housing. The chairman of Real Estate Indonesia, Bambang Ekajaya, summarised the direction of travel in one line: property prices get pulled up in the end.
What moves first is the schedule, not the price tag
Buyers tend to expect the wrong signal here. A project's first response to a cost shock is rarely a letter announcing a price increase. Ali Tranghanda, chief executive of Indonesia Property Watch, has noted developers re-phasing new projects while they wait to see where the market goes. Postponing a groundbreaking requires no announcement to anyone. Repricing units already sold requires a contractual basis.
So for a unit that is not yet built, the question worth pressing is not only what it costs, but what guarantees it will be finished at the price and on the date written down today. Those are two separate questions.
For a unit already standing, the building itself has answered the second one. Its construction spending was made at last year's prices, by somebody other than you. The full comparison of the two purchase routes sits in our note on off-plan versus ready-stock houses.
Five things worth asking before any deposit changes hands
- The unit's physical stage today, with evidence. Dated photographs, or better, a site visit to that specific unit. Not a render, and not progress on the block next door.
- The handover date written into the sale agreement, and the late-delivery penalty. A stated penalty per day of delay is far more useful than a verbal estimate of "around the end of next year".
- Whether a price adjustment or escalation clause exists. Some agreements permit an adjustment if material prices move past a defined threshold. If one is present, have the threshold and the mechanism explained before signing rather than after.
- How the current construction phase is funded. Asking whether this phase draws on a bank construction facility or internal cash is a reasonable question, and the answer indicates how tightly your handover date is coupled to the pace of sales.
- How mortgage funds reach the developer. If financing through a mortgage, ask whether funds are released in full at signing or in tranches against progress. Tranche release leaves the buyer better protected if construction slows.
If a schedule does slip badly, buyer rights and the sequence of steps are covered separately in our note on construction stopping while instalments continue. For reading a developer's track record before it ever reaches that point, there is our guide to choosing a developer.
Where an already-built unit sits in this arithmetic
Every figure above rests on one assumption: that a building still has to be built. Remove the assumption and most of the risk goes with it.
On Jl. Raya Perjuangan in North Bekasi, the Emerald 70 house stands two storeys in the Rp 700 million range with VAT included, on 47.25 m² of land with 70 m² of floor area, dimensions of 4.5 m by 10.5 m, and bore pile foundations. Instalments start from Rp 5 million a month. Bekasi Station is around 5 minutes away, Summarecon Mall around 5 minutes, and the Bekasi Barat toll gate around 10 minutes, in an area free from flooding. The Sapphire shophouse runs three storeys plus a rooftop in the Rp 1.9 billion range, on 72 m² of land with 172 m² of floor area, dimensions of 4.5 m by 16 m, driven-pile and stone foundations, and a 2,200 VA electrical supply.
For a unit already standing, only the fifth question above still needs chasing. The building answers the other four. That is not a reason to stop asking, though it does shorten the list.
Common questions
If construction costs rose 35 percent, will house prices rise 35 percent too?
No. The 35 percent figure describes escalation in construction work costs generally, not the share of construction within a house price. A selling price also carries land, permits, estate infrastructure, marketing, and margin. Bank Indonesia's own data shows selling prices moving far more slowly, at 0.69 percent over a year in the second quarter of 2026.
Does this mean now is a bad time to buy?
That is not the conclusion, and this article is not in a position to offer investment advice. What changes is not whether buying makes sense but which questions deserve priority. When build costs are climbing quickly, questions about certainty of completion move up the list and questions about discounts move down it.
Are off-plan units always riskier?
Not always. An off-plan unit in a project with clear phasing, a written schedule, and physical progress you can inspect has a very different profile from one that exists only as a drawing. The label is not what separates them; how many of the five questions above can be answered with documents is.
Can a buyer track these numbers independently?
Yes. The Residential Property Price Survey is published quarterly on Bank Indonesia's official website and is free to read. Our reading of the previous quarter is in the first-quarter 2026 survey note, while retail material prices are tracked in our building material price note.
Want to know whether the unit is standing or still being built?
The Kingspoint team can show the physical status of each Emerald 70 and Sapphire shophouse unit in North Bekasi, along with the written handover date and the disbursement arrangement.
Chat on WhatsAppRelated reading on the Kingspoint Blog
- Off-Plan Versus Ready-Stock Houses
- When Construction Stops but Instalments Do Not
- Reading Bank Indonesia's Residential Property Price Survey
Sources: Residential Property Price Survey for the second quarter of 2026, Bank Indonesia press release of 7 August 2026 — the source for internal developer funds at 73.28 percent of total funding requirement, mortgages at 70.05 percent of total purchase schemes, Residential Property Price Index growth of 0.69 percent year on year in the second quarter of 2026 against 0.62 percent in the first, and the 2.36 percent year-on-year contraction in primary-market residential sales against a 25.67 percent contraction the previous quarter. Construction cost escalation of up to 35 percent, increases of 41.52 percent for industrial diesel, 37.41 percent for world oil, 27.78 percent for rebar and 23.85 percent for asphalt between 28 February and 1 July 2026, the remarks of Indonesian Contractors Association chairman Djoko Sarwono, and the note on 20 member companies in critical condition come from Bisnis Indonesia reporting of 4 August 2026. The estimate of cement and steel at around 30 percent of construction cost, materials at 20 to 30 percent for landed housing, the remarks of Real Estate Indonesia chairman Bambang Ekajaya, and the note on project re-phasing from Indonesia Property Watch chief executive Ali Tranghanda come from Kontan reporting of 16 April 2026. This article is general in nature, is not investment advice, and does not replace document verification for any specific project.