More homes, better financing options, and more things we learned about Indonesian proptech in 2023 and 2024 from Pinhome’s recently published market report

We gleaned insights from Pinhome’s recently launched initiative: the Indonesia Residential Market Report. This report comes with the amount of coverage Pinhome has developed over the last 3 years, with more than a million housing inventories across the country and partnerships with more than 20 banks and financial institutions.

The first edition covers 2023 insights and outlook for 2024, and is not just for the homebuyer but also the industry, Indonesia, and proptech observers interested in the impact of government policy, economic growth, and proptech innovations like Pinhome’s on home buying behaviors and trends.

Pinhome Indonesia Residential Market Report 2023 & Outlook 2024

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(1) More homes in the market.

Thanks to VAT exemption and reduction incentives introduced by the government last year and corresponding demand increase, new inventory addition for housing projects and secondary homes in 2023 grew by 56% compared to 2022. There was also an increase in supply of housing projects priced below IDR 300 million (~$19K), well below the IDR 2 billion maximum requirement to qualify for the full VAT exemption.

What this means for proptech in Indonesia: Greater opportunity to improve the way homebuyers access this supply. This means having a far more robust transaction journey than the traditional process. In Pinhome’s case, they’ve made it their business to make life easier for first time homebuyers. For instance, shortening the property purchasing process from a typical 6 months to 1 to 3 months on average, leveraging a combination of AI and availability of choices for the consumer.

(2) Paying for homes faster with more certainty.

Market preferences over the past year shifted towards shorter, fixed rate tenures to reduce long-term interest rate burdens and uncertainties. In particular, there was greater interest in Home Ownership Loans (KPR) Take Over programs. For Pinhome, 7 out of 10 prospective home buyers on Pinhome simulate KPR mortgages with 0% to 10% downpayment.

What this means for proptech in Indonesia: Having choices doesn’t just extend to listings but also home financing. This means partnerships with banks and FIs are necessary in order to provide as much optionality as possible to consumers. And even the optionality may not be enough. There also needs to be innovation in the way the optimal financing options are delivered to the consumer (e.g., how does the platform know which banks to recommend based on a consumer’s background or livelihood)

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(3) Homes around industrial land and tourist spots.

This year, Pinhome projects in its report a positive trend in demand for new affordable houses (below IDR 500 million / $32K) in areas expected to benefit from infrastructure development (like Greater Jakarta) and from tourism recovery (like Bali). Even then, local economic growth outside of Java and Bali is accompanied by increase in demand for second hand homes as well as rentals.

What this means for proptech in Indonesia: Opportunity to drive industry innovation and maturity in areas outside of major metropolitan or tourism hubs, but the challenge is having the right people and partners on the ground.

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(4) The demand for homes is reflected in Pinhome’s own platform as well.

4 out of 5 of users are first time home buyers and 93% of users are looking for a home as opposed to a property investment. This is inline with Pinhome’s vision to unlock first home ownership in Indonesia.

What this means for proptech in Indonesia: Home ownership is still one of the nation’s biggest challenges, particularly amongst the young generation. This provides an opportunity for companies like Pinhome to set the standard for these consumers on the best possible property transaction journey for them.

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