Indonesian Property Sector Gains from Potential BI Rate Cut

Positive Outlook for Property Issuers

The possibility of Bank Indonesia (BI) continuing to cut its benchmark interest rate until 2026 is seen as a positive development for Indonesian property issuers. This potential monetary easing is expected to drive demand in the middle to premium property segment. Analysts from Kiwoom Sekuritas Indonesia and Samuel Sekuritas Indonesia view this as a significant positive catalyst for the sector.

Recommended Stocks in the Property Sector

Several property stocks are highlighted as potential beneficiaries of a BI rate cut. These include:

• PT Bumi Serpong Damai Tbk (BSDE)
• PT Pakuwon Jati Tbk (PWON)
• PT Ciputra Development Tbk (CTRA)
• PT Summarecon Agung Tbk (SMRA)

Analyst Insights on Rate Cut Implications

Liza Camelia Suryanata, Head of Equity Research at Kiwoom Sekuritas Indonesia, noted that further cuts in BI Rate would boost buyer confidence significantly. The impact is expected to be particularly strong in the middle-class property segment, while remaining positive for the high-end segment, albeit to a lesser extent.

Harry Su, Managing Director of Research and Digital Production at Samuel Sekuritas Indonesia, highlighted that a cut in BI's benchmark interest rate could have multiple implications for the property sector. The reduction in borrowing costs is likely to stimulate demand, particularly in segments sensitive to interest rate changes.

Market Reaction and Future Outlook

The potential rate cut of 50-75 bps by 2026 is seen as a positive catalyst for property issuers. With the BI Rate reduction, property developers are likely to see increased demand, particularly in the middle to premium segments. This development is expected to drive growth in the Indonesian property sector, providing a boost to issuers with significant exposure to these market segments.