Rising Building Material Costs of 10–15% Hit Indonesian Developers as Home Sales Weaken
Developers in Demak report rising building material costs of 10–15% this year, while completed homes pile up unsold as sales weaken.
Several Indonesian housing developers say sales are weak just as building material prices are climbing. On 12 October 2026, Kompas.com interviewed Yulistyo Ramon Adianto, owner of PT Bogosari, which develops several housing clusters in Demak, Central Java.
Unsold homes are piling up
Ramon said many completed homes are now sitting unsold as demand has fallen, especially for subsidised housing. He said the problem is made worse by material inflation he puts at 10–15% across materials this year. Builders' wages have risen by a similar range.
Cost per square metre is rising
For non-subsidised, non-luxury homes, Ramon said building costs that used to be about Rp3.5 million per square metre can now reach Rp4 million. Materials with notable increases include cement, PVC pipe, steel and galvalume. Developers face a dilemma: raising prices in a weak market makes homes harder to sell, while holding prices squeezes margins.
In the same article, Kompas quoted Real Estate Indonesia (REI) deputy chairman Bambang Ekajaya, who said construction costs have jumped more than 20%, and as much as 50% in some regions, partly because of higher fuel prices. He put the property-sector inflation index at 9.52%, while developer margins are around 10% to at most 15%.
Ways to contain costs
BPS data show the building materials wholesale price index rose 9.63% year on year in September 2026, consistent with developers' complaints. In this environment, procurement efficiency becomes decisive. Common approaches include buying closer to the manufacturer, pooling purchases across projects for larger volumes, choosing products of equivalent quality at better prices, and planning deliveries to avoid repeated handling and storage costs on site.
Where homeX fits in
As a one-stop building materials and furniture service platform in Indonesia, homeX follows these developments closely. With a showroom, warehousing and delivery based in Tangerang, we aim to help contractors, building-material shops and homeowners get materials of clear quality, visible stock and deliveries they can plan around.
FAQ
What does it cost per square metre to build a house now? For non-subsidised, non-luxury homes, costs that were about Rp3.5 million per m² can now reach Rp4 million, with notable rises in cement, PVC pipe, steel and galvalume.
How much have construction costs risen according to REI? REI deputy chairman Bambang Ekajaya said construction costs are up more than 20%, and as much as 50% in some regions, while developer margins are around 10–15%.
Rising building material costs: related articles and products
Related articles:
- Building Material Prices Indonesia, September 2026: Construction Wholesale Index Up 9.63%
- Indonesia Housing Programme Reaches 1.79 Million Units by October 2026: Demand for Building Materials
- FLPP Subsidised Mortgages Reach 185,333 Homes by 20 October 2026, Targeting 350,000
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Source: Kompas.com, 12 Okt 2026