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00:00 Hello, welcome back.
00:04 PIN Home has released its residential market report 2023 and outlook 2024.
00:10 This latest report reveals important findings as an initiative to increase access to home
00:16 ownership, especially for Indonesia's younger generation.
00:22 According to government statistics, around 81 million Indonesian millennials still do
00:27 not own a home.
00:29 However, PIN Home's analysis still found some positive trends.
00:34 The government's value-added tax or VAT exemption program propelled a 27% surge in demand for
00:41 new homes by the end of 2023.
00:44 Meanwhile, there was significant growth in housing demand in tourist-centric areas such
00:50 as Bali and in areas with high infrastructure development such as Tangerang and West Bandung.
00:57 And in response to the Federal Reserve's rate hikes and their impact on loans in Indonesia,
01:04 buyers favored shorter loan tenures to alleviate long-term interest burdens.
01:12 To talk more about how the younger generation in Indonesia can buy a house and what opportunities
01:18 and challenges they may encounter, join me now in the studio is Dayu Dara Brahmata.
01:23 And she is the CEO as well as founder of PIN Home, which is a property tech platform offering
01:28 end-to-end home ownership solutions.
01:30 Hi Dara, thank you for stopping by.
01:32 Pleasure is mine.
01:33 Thanks for having me, Alia.
01:34 Yeah, of course.
01:35 So, based on the PIN Home residential market report in 2023 and as well as the outlook,
01:40 there are many young Indonesians who do not own a home.
01:43 It's mentioned that the number is 81 million millennials who do not own a house.
01:48 So what are the main obstacles faced by the youth in owning a house?
01:52 Absolutely, before that, allow me to introduce PIN Home.
01:55 PIN Home is a property technology platform for home seekers focusing on first-time home
02:00 buyers and on PIN Home, basically, you can find properties, sell and rental, agents,
02:06 you can find even home services such as home cleaning, electronic AC repairs and maintenance,
02:12 and our vision is to unlock home ownership.
02:14 Now to your question, Alia, about what is this reason or the reason between the gap
02:23 between reality and aspiration.
02:25 So the reality is 81 million millennials are yet to own their home, but at the same time,
02:30 recent studies show that millennials are prioritizing to buy their home, right?
02:36 They like home ownership and they aspire to have home ownership.
02:39 And the challenges are really two fronts.
02:41 One is the information gap, and the information gap is really about limited information on
02:48 home ownership.
02:49 And that's what PIN Home is trying to solve by kind of providing all information necessary
02:55 to make informed decisions and start your home ownership journey, such as how much property
03:00 can I afford?
03:01 What is my monthly mortgage installment?
03:04 And for example, what are the steps to buy a home?
03:06 What are the requirements for mortgage?
03:08 What is the down payment that I have to pay?
03:10 And all those informations are available for every listing that you're seeing.
03:14 You're seeing all these statistics and numbers about how much that would translate to your
03:19 monthly mortgage payment and how much down payment you have to prepare.
03:23 What's the simulation for the mortgage, et cetera.
03:25 And the second challenge is really financial constraints.
03:29 So simply put, the increase in property prices are much higher than the increase in income.
03:35 Property prices increase 5% to 10% a year, but income only increase about 2.5% a year.
03:44 That makes home ownership become more difficult.
03:47 Now, how PIN Home is solving that playing our part is by giving access to more affordable
03:52 housing.
03:53 So of the millions of properties that are in PIN Home, about 80% are in category of
03:59 affordable homes.
04:01 More than 20% are in properties that are less than 300 million.
04:06 Sometimes even property is affordable or seemingly affordable, you still need financing.
04:11 We also provide access to financing mortgage from hundreds of programs from 20 different
04:18 banks.
04:19 All right.
04:20 So, I mean, there are a lot of young people maybe not feeling enough on their own salary,
04:26 although they have a fixed income every month.
04:28 So what is your suggestion for them?
04:31 I mean, having a salary of 5 million rupiah a month, do you think they are eligible enough
04:37 to own a house in Jakarta?
04:39 Absolutely.
04:40 Or Tanggerang?
04:41 Absolutely.
04:42 You could basically earn, let's say, 4 million, which is lower than in Jakarta's minimum
04:47 wage and can still buy a home.
04:51 Government for example has a set of properties called subsidized home, priced at about 168,
04:57 170 million.
04:59 And if you're earning a certain category of income, like 4 million or basically below
05:04 minimum wage, you can get access to subsidized mortgage and subsidized housing.
05:09 But essentially, home ownership is accessible, right?
05:13 What you need to know is what is the property price that you can afford and whether you're
05:18 eligible for mortgage.
05:20 And on PINHome, those are the first few questions that we help answer through features like
05:26 home buying tutorial, mortgage simulation, property price estimate or budget estimate.
05:34 These are the features that we build specifically targeted at first-time home buyers so they
05:39 can have information.
05:40 So we're looking at 81 million, millenials out there and generations that who are not
05:46 owning a house yet.
05:47 So why is this happening in Indonesia?
05:50 Well, definitely the first is information gaps, right?
05:55 I mentioned about the information gaps, having limited access to information to understand
06:01 where can you start your home ownership journey.
06:03 So they have to start searching for that as well, right?
06:06 Absolutely.
06:07 So you need to know with your income right now, how much is the maximum price of property
06:11 that you can afford.
06:12 And if you feel you need financing, then how much is the monthly mortgage installment and
06:18 whether you're eligible for mortgage.
06:20 There'll be also questions about how much down payment that you have to prepare and
06:24 what is the transaction fee associated with buying a home.
06:29 All this financial information you need to know so you can plan ahead.
06:33 So that's kind of the first challenge that we're tackling for PINHOME.
06:38 The second challenge I mentioned about financial constraints and the solution to that, at least
06:44 from PINHOME point of view, is just making and surfacing these affordable homes to first-time
06:49 home buyers.
06:50 And hopefully then they'll also be supported by financial incentive, tax incentive from
06:54 government like VAT exemption that we just talked about, right?
06:59 Or for example, rapid infrastructure development that would allow other areas adjacent to Jakarta
07:06 with cheaper land price to get developed by primary property developers.
07:10 Since you mentioned about the government, so what is the stakeholders role, including
07:14 government as well as developers in sort of like closing the gap?
07:18 Absolutely.
07:19 Like they both play very important role to increase home ownership.
07:24 Home ownership is about accessibility of the supply, having affordable supplies, affordable
07:29 properties.
07:30 And what, for example, giving a real example of how government help increase home ownership
07:36 with the VAT exemption that was released in November 2023, just in one month time, we
07:42 saw surge of demand and transaction between November to December at about 27%.
07:48 It's just month over month because home seekers are super excited about having that access
07:54 to no 11% tax on the new homes.
07:58 And then second example about how rapid infrastructure development by the government really helped
08:03 propel the growth of the supply.
08:06 So Serpong Bogor toll road construction actually helped increase supply in the area adjacent
08:13 to the toll road by 115%.
08:16 So primary property developers are super excited when they saw that there is this massive toll
08:21 road construction.
08:22 They started securing lands and building property.
08:25 So we look at other places maybe surrounding Jakarta.
08:29 So when you talk about affordable housing options in the city and Jakarta, has there
08:34 been a shortage of affordable housing?
08:37 Because we know that the first time buyer might be thinking, "Oh, those are just too
08:41 expensive.
08:42 I can't find a home outside Jakarta, maybe on the outskirts."
08:46 Yes, no, absolutely.
08:48 Well, property prices and lands in big cities tend to be more expensive.
08:53 And that's why it's really important for home seekers to look for opportunities to
08:59 buy a home in adjacent cities where the infrastructure development is going rapidly because that
09:07 will definitely warrant good appraisal in property prices, right?
09:14 Increase in property price over the years after you purchase them.
09:18 And also it will provide you with accessibility.
09:20 So although you live in city center like in Bogor and Tangerang or Depok or Bekasi because
09:25 of the accessibility, it's not too painful for you to travel into the city.
09:31 Actually matter of fact, it could be faster than if you were trapped to travel inside
09:34 the city with car.
09:35 Hopefully we see that in the next coming future.
09:37 So just very short, some trends you expect to see in the coming years?
09:42 Simple, home search is going to be online and home financing is going to be online.
09:46 And home search is going to be online because if you see these millennials, it's one thing
09:50 that they have in common is there's glue to their phones and smartphone is everything
09:54 is there, how they access information and how they access information about home ownership
09:58 as well.
09:59 And we see that the home seekers, millennial home seekers are getting more and more savvy
10:04 and getting smarter.
10:05 So when they look for homes, they're not just looking at based on, for example, pricing
10:10 or areas, they look at based on what is the financing scene, what is the incentives like,
10:15 is it a 0% down payment?
10:17 We see these keywords being thrown.
10:19 Is it like, for example, I can install the down payment over a longer period of time
10:24 for new properties, for example.
10:26 Now on the mortgage side, the home seekers are also looking for mortgage online, right?
10:32 And the two things that we're seeing the trend, number one is they're looking for longer fixed
10:36 period because they realize how interest rate volatility could really affect their mortgage
10:40 installment and all of a sudden your mortgage installment becomes much higher when you're
10:43 in a floating period.
10:46 So that's the first one.
10:47 And the second one is they will think about refinancing once they go in the floating period.
10:53 So they are becoming more and more financially savvy.
10:56 All right.
10:57 That's great to hear.
10:58 And thank you so much for giving us all the information and insights, Dara.
11:00 Pleasure.
11:01 Thank you so much.
11:02 It's been a pleasure.
11:03 It's been a pleasure.
11:04 And be home offers that services as well.
11:05 So yeah, young generation, you can check out PinHome.
11:07 All right.
11:08 We're going for a break.
11:09 When we return, we'll have more business and economic updates.
11:11 Stay tuned on C2Day Business.
11:12 Thank you.
11:13 Thank you.
11:14 You look great.
11:14 [Music]
11:15 [End of Audio]
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