The Property Buying Process and Millennials
There has been a growing concern about the ability of millennials and Gen Z to afford property. One of the main reasons for this concern is the increasing cost of property which has risen significantly in recent years due to a range of factors including urbanization, population growth, and rising land prices. While the complexity of property buying transaction has been resolved with the help of agents and the emergence of digital agents, the financing part of the transaction remains a burden for most first-time buyers.
One of the most popular financing options for property buyers in Indonesia is mortgages. According to Bank Indonesia, 75% of residential properties are bought with mortgage. The outstanding balance of mortgages in the country reached IDR 617 tn as of December 2022.
However, it is difficult to qualify for a mortgage. One of the main challenges is the requirement for a substantial down payment. Many lenders require a minimum DP of 20%, which can be a significant hurdle for those who are just starting out in their careers.
Despite the challenges, it is important to note that there are still options available for millennials and Gen Z who are looking to enter the property market. One such option is the KPR Easy Start product from OCBC NISP, which offers a low down payment and flexible repayment terms to help borrowers achieve their property ownership goals.
KPR Easy Start is a mortgage product offered by OCBC NISP in Indonesia that is designed to help first-time homebuyers, especially millennials and Gen-Z, to get lower installment payments in the beginning of the loan period, making it more affordable for borrowers who may be starting out in their careers and have lower salaries. As they progress in their careers, they may expect to have higher salaries, which can make it easier to afford higher installment payments later on.
OCBC NISP Ventura
March 2023 Newsletter