Loan to value (LTV) ratio policy and its impact to property development

Dyar Paramitha, Ahmad Gamal, Azrar Hadi

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

One of the changes in Bank Indonesia (BI) policy Number 20/8/PBI/2018 (PBI, 2018) regulates the Loan to Value (LTV) ratio for a residential property loan. This research examines changes in housing developer behavior in providing the housing products before and after the loan to value ratio (LTV) easing policy. The changes in the Bank Indonesia policy to release the loan to value ratio for the purchase of the first house with an area of more than seventy square meters is one of the government's solution to encourage the growth of housing property. This issue is due to the difficulty of the first-time home buyer in paying the down payment. The design of this research uses a case study of multiple case holistic designs and uses a qualitative analysis method. Qualitative data were obtained from in-depth interviews with nine housing developers. We found that most developers are willing to change their market segmentation to a lower segment (36 household type) than the previous ones that they have set. We concluded that the LTV ratio easing policy cannot help many developers if the macroeconomic conditions are still weak.

Original languageEnglish
Title of host publicationRecent Progress on
Subtitle of host publicationEnergy, Communities and Cities - Proceedings of International Symposium on Sustainable and Clean Energy, ISSCE 2019: Quality in Research 2019
EditorsYuliusman Yuliusman, Cindy Dianita
PublisherAmerican Institute of Physics Inc.
ISBN (Electronic)9780735419896
DOIs
Publication statusPublished - 4 May 2020
Event16th International Conference on Quality in Research, QiR 2019 - 2019 International Symposium on Sustainable and Clean Energy, ISSCE 2019 - Padang, Indonesia
Duration: 22 Jul 201924 Jul 2019

Publication series

NameAIP Conference Proceedings
Volume2230
ISSN (Print)0094-243X
ISSN (Electronic)1551-7616

Conference

Conference16th International Conference on Quality in Research, QiR 2019 - 2019 International Symposium on Sustainable and Clean Energy, ISSCE 2019
Country/TerritoryIndonesia
CityPadang
Period22/07/1924/07/19

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