Thekabarnes.com—The Indonesian property sector is facing significant problems. Prices of building materials have surged up to 40 percent in the last few months. With these expenses rising, developers and suppliers are re-evaluating their business plans. They want to prevent losing money.

“Almost all building products are pricier now, especially those that use imported raw materials,” said Daniel Lim, proprietor of a building material store in Blitar, East Java, Indonesia.

He said water-based paint in plastic packaging was up 10–20 percent. Oil-based paint, dependent on imported oil derivatives, has seen even sharper rises of 20 to 40 percent in the same period.

“Prices have increased almost across the board, especially those materials that are imported,” remarked Daniel, as quoted in Patria News, Thursday, April 23.

Other products, such as sanitary products, bathroom doors, and granite doors, have also gone up by roughly 5–10 percent.

The country manufactures many of these products. However, most still rely on imported raw materials. That means the pricing of things in the local market is still dependent on how the global market and currency are moving. As a result, it is difficult to avoid price hikes.

Daniel said the Indonesian government must provide solutions, not measures that would pile more strain on already pressurized firms. The government should offer financial support or subsidies to help them cope with rising costs.

The property sector is also experiencing significant pressure from rising costs. Hery, a property developer from Kanigoro, also said the crisis had a direct impact on projects under way.

“Many contracts were pre-price rises, so we’re still working off old project values, and material costs have gone up,” he stated.

The mismatch has tightened profit margins. This situation is forcing developers to absorb the extra costs without being able to alter the selling prices set previously.

“Another concern in subsidized housing projects. The government guidelines impose a fixed maximum sales price for such dwellings, limiting developers’ ability to modify pricing when costs grow,” said Blitar property developer Rendy Permana.

“That’s a lot of pressure, especially on the subsidized housing where we can’t raise our pricing even as our material costs go up,” he added.

The steady hike in expenses could lead developers to non-subsidized housing developments. In these cases, they have greater latitude to set rates, industry analysts warn.

The issue is a symptom of greater economic strains around the world, such as supply chain disruptions and commodity pricing. These problems still impact companies that are highly dependent on imported materials.

As construction costs rise, the property sector faces a critical period of adjustment. Developers must balance cost efficiency, pricing strategies, and project sustainability to remain competitive in a challenging economic environment.

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