Loan to Value (LTV) Ratio Policy and Its Impact to Property Development

摘要

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.