Determinant Influencing Factors for Subsidized House Preferences in Bandung Regency
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RESEARCH ARTICLE European Journal of Business and Management Research www.ejbmr.org Determinant Influencing Factors for Subsidized House Preferences in Bandung Regency M. R. Andrianto and R. A. Rahadi ABSTRACT The increasing population with a limited area of land makes house prices in Bandung City becoming expensive. Many people looking for a cheaper Submitted : July 30, 2021 price in the outer city such as in the area around Bandung Regency. It is Published : August 21, 2021 the largest region and the most populated region that bordered Bandung ISSN: 2507-1076 City. One type of house that is widely offered in the region is subsidized house. It is a house that some of the payment is assisted by the DOI: 10.24018/ejbmr.2021.6.4.1002 government. The data shows that the subsidized house realization is increasing every year. This research aims to investigate the influencing M. R. Andrianto* factor that influences people's preference for the subsidized house in Master of Business Administration, Bandung Regency. Several pieces of literature concludes that the School of Business and Management, influencing factor for subsidized house preference is price, physical Institut Teknologi Bandung, Indonesia. attributes and qualities, accessibility, location, and facility. The (e-mail: reza_andrianto@ sbm-itb.ac.id) methodology used for this research is using quantitative and qualitative R. A. Rahadi studies. The study is using mixed method between quantitative and Master of Business Administration, qualitative method by conducting questionnaires, and interviews. The School of Business and Management, findings of this research could be useful for the stakeholders such as Institut Teknologi Bandung, Indonesia. consumers, governments, and real estate developers. For consumer, this (e-mail: aswin.rahadi sbm-itb.ac.id) research could be a guide to help the customer find out about their *Corresponding Author preferences toward the subsidized house. The government could use this research result as guidance and evaluation on their policy. The real estate developers also could use this research to be used as information for their business strategy. Keywords: Preferences, Property, Real Estate, Subsidized house. I. INTRODUCTION The ministry of public work and housing in west java As population growth and urbanization continue, cities are province noted that in 2015, the backlog or the need for faced with some challenges such as pressure on housing proper housing in West Java was 1,225,737 units. However, markets [1]. The increasing number of populations create in 2019 the figure swelled to 1,905,960 units. In term of housing problem in the city. Many cities face those problems, subsidized house, the data from the ministry of public works one of which is Bandung city. The steady increase in property and housing’s website also shows that the realization of one prices makes it low-income earners harder to own a house in of government the subsidized house program is increasing Bandung City, and it is worsening due to the COVID-19 every year. pandemic. So, many people looking for a cheaper price in the outer city such as in the area around Bandung Regency. 120 000 109 253 One of the most widely offered types of houses is 100 000 subsidized house. It is a simple and affordable house in which 77 835 the developers and buyers of the house receives subsidized 80 000 57 939 assistance by the government [2]. The provision of the house 60 000 is assisted by the government through the ministry of public 40 000 work and housing by initiating a program called the "1 23 763 20 000 million housing program". The government help people to Unit House Subsidized own subsidized house by assisting some of its payment of 0 installment and down payment through public work and 2017 2018 2019 2020 Year housing ministerial decree No.42/PRT/M/2015. They also assist the real estate developer who offers the subsidized Fig. 1. Realization of FLPP Program 2017-2021 [3]. house by reducing the tax such as income tax and value-added tax through Minister of Finance Regulation no. It shows that the need for the subsidized house is high. So, 113/PMK.03/2014. knowing the preference of subsidized house becomes 9DOI: http://dx.doi.org/10.24018/ejbmr.2021.6.4.1002 Vol 6 | Issue 4 | August 2021 317 RESEARCH ARTICLE European Journal of Business and Management Research www.ejbmr.org necessary. It also shows that the opportunity of real estate 4. Subsidi Bantuan Uang Muka (SBUM) developers to gain profit from selling subsidized houses still Down Payment Subsidy (SBUM) is a government subsidy consider high. So, to maximize the profit for real estate given to low-income people to assist the down payment on developers, and also to support the government program. It is purchasing a house by giving cash assistance for 4 million better to know the preference on the subsidized house. It aims IDR. to find the subsidized housing preference that people desire and need on the market even with the limited price offered. B. Consumer Preference So, real estate developers could know what attributes that Consumer preferences as an option like or dislike the people desire and need to maximize sales and compete with person against products (goods or services) are consumed. other developers. For the government, they could find out Consumer preference indicates consumer preferences from a what minimum standard of subsidized housing is needed and wide selection of products available. Analysis of consumer necessary for the people, evaluate the current program, and preferences is an analysis that aims to find out what people fulfill their housing program. likes and dislikes of consumers, as well as to determine the order of importance of the attributes of the product and the product itself [4]. II. LITERATURE REVIEW Housing preference is the user's subjective evaluation of A. Subsidized House housing. It refers to the users' requirements, expectations, and emphasis on the characteristics of various housing [5]. People In Indonesia, a subsidized house is a simple and affordable in different classes may have different expectations for house in which the developer of the housing receives personal and family behavior and housing preferences and subsidized assistance for the construction of public facilities choices [6]. Subsidized house which intended to low-income and or social facilities within the housing complex. For a people, they are more concerned with the priority scale of home buyer, they would receive the house price that has been housing locations close to workplaces that have land standardized by the government at the market price. If the ownership status, and housing quality [7]. buyers are using mortgage service to purchases the house, they will receive a fixed interest rate which is the C. Price Factor government's policy through the ministry of public works and Price is the amount of money charged for a product or housing [2]. service or the sun of the value that customers exchange for The subsidized house standard on price or building the benefits of having or using the product or service [8]. specification was standardized through regulation of the Price is one of the most influencing factors for the customer's ministry of public works and housing decree No. 242 / KPTS decision-making process when purchasing a product [9]. / M / 2020 which stated that subsidized house maximum price Continents, countries, and cities differ in factors that is different in every region. In java island, the current determine the residential housing price [10]. maximum price of the subsidized house is Rp. 150.500.000; In Indonesia, the price of subsidized houses regulated with the down payment of 5% which is lower than the normal through the ministry of public works and housing decree No. standard of 10%. 242 / KPTS / M / 2020. This price varies on every island in Based on pembiayaan.pu.go.id, there are several programs Indonesia, with the lowest prices in Java (non-Jabodetabek) that is regulated by the government through Indonesian and Sumatera (non-Kepri and Babel) of 150.5 million IDR, ministry public works and housing decree regarding the and the highest in Papua, amounting to 219 million IDR. The provision of the subsidized house through the ministry of interest rate and a down payment rate also regulated which is public works and housing which are: 5 percent. In this research, the price is categorized into the 1. Fasilitas Likuiditas Pembiayaan perumahan (FLPP) overall price of the house, the amount of installment, and the Mortgage amount of downpayment. FLPP mortgage is a housing mortgage program provided D. Physical Attributes and Qualities Factor by the government specifically to assisted low-income people The physical attributes are the first thing noticed by the in purchasing a subsidized house which offers an installment consumer when looking for a house [11]. Housing-related mortgage interest rate of 5% up to 20 years with the attributes of a building had been recognized in the literature downpayment of 5%. as influencing households' buying/renting preferences [12]. 2. Subsidi Selisih Bunga (SSB) Mortgage attributes such as electricity, water, amount of space, SSB mortgage program is a homeownership mortgage external/internal design, and type of window/ventilation also program issued by the government with a reduction in interest influence consumer preference [13]. Other research also rates which the program is more or less similar as the FLPP stated that lot size, number of bedrooms and bathrooms, and program, but the 5% installment interest rate is only fixed for presence of garden, and appropriate passive design are the 10 years, attributes that influence home-buying preferences. Space also 3. Bantuan Pembiayaan Perumahan Berbasis Tabungan has been identified as a leading aspect of the home-buying (BP2BT) Mortgage decision-making process [14].