Proceedings of the first International Conference on Social Sciences, Humanities, Economics and Law, September 5-6 2018, Padang, Indonesia

Research Article

The Relationship between Macroeconomy and Property Price on Housing Mortgage in Indonesia

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  • @INPROCEEDINGS{10.4108/eai.5-9-2018.2281277,
        author={Njo Anastasia and Ferry Diyanto},
        title={The Relationship between Macroeconomy and Property Price on Housing Mortgage in Indonesia},
        proceedings={Proceedings of the first International Conference on Social Sciences, Humanities, Economics and Law, September 5-6 2018, Padang, Indonesia},
        publisher={EAI},
        proceedings_a={ICONSHEL},
        year={2019},
        month={3},
        keywords={macroeconomic property price mortgage proportion},
        doi={10.4108/eai.5-9-2018.2281277}
    }
    
  • Njo Anastasia
    Ferry Diyanto
    Year: 2019
    The Relationship between Macroeconomy and Property Price on Housing Mortgage in Indonesia
    ICONSHEL
    EAI
    DOI: 10.4108/eai.5-9-2018.2281277
Njo Anastasia1,*, Ferry Diyanto1
  • 1: Petra Christian University
*Contact email: anas@petra.ac.id

Abstract

The growth of housing mortgage (HM) value displays a flourishing annual trend in line with the number of house purchase using the named credit facility. The amount of HM given by the bank to the buyer is affected by macroeconomic condition. The high inflation rate causes the people’s buying power to weaken and triggers the interest rate to drop. Buyer receives benefit in a condition of reduced HM cost, as well as in the contrary condition, causing the proportion of HM to go up. This research aims to examine the relationship between macroeconomic growths toward the proportion of HM in Indonesia. Macroeconomic variables reviewed are Gross Domestic Product (GDP), inflation level, residential property price, and interest rate. The research period extends between the years 2005-2016 through Auto Regressive Distributed Lag (ARDL) bound test model technique in order to see the relationship between each variable. As a result, the test reveals a significant long-term relationship between the variables of GDP, inflation level, and residential property price with the HM proportion. However, no relation is found between the amount of interest rate and HM proportion.