Property Industry and Subsidized Housing’s Respond to Macroeconomic Factors in Indonesia

This research aims to determine the subsidized housing’s amount of distribution which is affected by house price index with determinants of macroeconomic factors and sharia compliance in order to improve the performance and participation level of Islamic banking to distribute more subsidized houses. This study attempts to examine more about subsidized housing’s problem using a quantitative approach to develop the study about it. 154 data were collected from 14 banks that delivered the subsidized housing and be analyzed by using the Partial Least Square – Structural Equation Model method with software Warp PLS 7.0. The results stated that inflation and GDP significantly affect the house price index negatively. While interest rate and sharia compliance have no significant impact on house price index. Moreover, the house price index has no significant impact on subsidized housing’s amount of distribution. This study could widen the insight which is related to subsidized housing. It could develop the strategy for sharia banks to increase their performance and participation level in delivering the government’s program, especially during the Covid-19 pandemic.