Remarks of President of the Republic of Indonesia at the Opening of the 17th National Conference of the Indonesian Real Estate at Grand Ballroom Hotel Sheraton, Gandaria City Special Capital Region of Jakarta, August 9, 2023
Assalamu’alaikum warahmatullahi wabarakatuh,
May peace be upon us all,
Greetings of Virtue.
Distinguished Minister of Public Works and Public Housing, Cabinet Secretary, Governor of Special Capital Region of Jakarta; Deputy Ministers of the Indonesia Onward Cabinet,
Distinguished General Chairperson and Members of the Central Board of the Association of the Indonesian Real Estate (REI),
Chairperson of the Organizational Advisory Board and the REI senior members who are here, President Director of PT. Bank Tabungan Negara Tbk,
Distinguished Chairperson and officials of the REI’s Central Board across Indonesia.
Ladies and Gentlemen.
Every time I hear “REI,” words like massive and expansive will come into my mind since its membership, in my notes, in 1972 there were 33 companies. Currently, as Pak Totok said earlier, there are 6,400 companies.
The association grew fast, very fast. And members range from big, middle, to small and micro levels. There are all of them. All are facilitated and accepted by the REI. I am glad that the sectors of property, real estate, and construction in Indonesia remain strong, resilient, and more competitive during the global economic slowdown.
From 2018 to 2022, the contribution of real estate sector reached Rp2,300-Rp2,800 trillion to the country’s economy each year. It is huge. The figure is equal to 16 percent of the country’s Gross Domestic Product (GDP). It is huge. It also provides employment for 13-19 million people. It is also huge number.
Why do many countries want to drive their economy through real estate and property sectors? It is because the sectors made a huge contribution to the GDP, creating multiplier effects to 185 industrial subsectors. It is huge. There is no other industry with a massive effect than property, real estate, and construction. Multiplier effect to 185 industrial subsectors.
In terms of materials, related industries such as cement, bricks, steel, and paint will be driven by property and real estate sectors. As for furniture and interior industry, demand for chairs, lamps, beds, toilets will be high since there are many new houses. In electronic industry, we are aware that a new house needs TV, refrigerator, dispenser, and other house appliances. A new house also needs kitchen appliances such as cookware, spoon, fork, and the like. Do not forget the service industry. Electrician, garbage man, gardener, plumber can be involved.
And we know that not all property sectors in other countries can survive, be it caused by COVID-19 or other economic matters. We know that in China there are collapsed large property companies since their debts have beaten our State Budget, their debts skyrocket to Rp4,400 trillion. Please do not clap your hands. They have a debt of Rp4,400 trillion. Does the audience here have that much debt?
Again, be careful about that. We have to control everything. For example, how much our backlog is. Do not build houses carelessly. We may not have the backlog anymore. Do not be like that. Everything must be controlled and managed.
Thank God, in Indonesia it does not happen like that since house demands in the country are very high,. the backlog of house ownership is still at 12.1 million. This is an opportunity that can be leveraged by all REI members. The growth of new family heads reaches 800,000 per year. So, if there are new REI members in the future, I think there will still be a lot of opportunities. Once again, the growth of new family heads is 800,000 per year.
And the most important, our economic performance is good. Last Monday, Chairperson of REI Pak Totok said that Indonesia’s economy grew by 5.17 percent. And it grew more than 5 percent for seven quarters in a row. The only G20 countries that have growth above 5 percent are Indonesia, India, and China. I cannot mention economic growth of other countries.
Today, a nation cannot expect to survive without competitiveness because all countries are in tight competition to improve the economy and secure investment. Everything is a bone of contention. All countries are improving their services, speeding up permit and land acquisition process since we cannot depend only on the State Budget (APBN) to develop the country. Investment is the key.
And we also have the courage to open a new economic center, namely IKN (Nusantara Capital). Currently, there is only one, the biggest project in the world, that is in Indonesia, which is called the Nusantara Capital. Later, there will be a presentation from Pak Dhony from the Authority of Nusantara Capital, as of last July 27, 34,000 hectares of land could already be bought since nothing is free. As for the price, you can ask Head of the Authority. It is an opportunity.
On this auspicious occasion, I order the REI to continue strengthening collaboration with the Government in helping the people to have healthy and proper housing with the One Million Houses program. Please also pay attention to social and environmental impacts. This is important. Please prevent the well water of neighboring village to run dry or even becomes flooded after the residential area construction is finished.
And, at this national conference, you could formulate strategic measures to address the current opportunities and challenges. In our country, almost all cities are same, without differentiation. Why can’t we develop a city as a city of corn with all the amenities, a city of fish, a city of furniture, a city of golf, just like in the United States. Thematic cities, not unvarying cities. I think the REI can formulate such plan to achieve that goal.
That concludes my speech on this auspicious occasion.
By saying bismillahirrahmanirrahim, I hereby officially open the 17th National Conference of the Indonesian Real Estate 2023.
I thank you.
Wassalamu’alaikum warahmatullahi wabarakatuh.