ANALYSIS OF HOUSING AFFORDABILITY BY GENERATION Y BASED ON PRICE TO INCOME RATIO IN JAKARTA REGION

• Main Author: Putri Pradana, Dian
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/64405
• Institution: Institut Teknologi Bandung

Indonesian Generation Y lack of affordability in purchasing a house has become a much discussed issue and attracted the researcher’s attention about the details behind it, both in terms of preferences, indexes, and solutions to deal with the problem. In this research, Generation Y is described as Indonesian society born between 1980 to 2000 as the most dominating generation in the population that as well become the most influencing generation to the GDP. The calculation used in this research is the price to income ratio, and further used in Bourassa’s (1996) calculation in which the ratio should be less or equal to the affordability limit. Generation Y’s preferences in purchasing a house were also investigated in this research in order to understand which preferences will affect the demand and price of the houses because price is also an indicator used to identify the affordability. In addition, those preferences also will help some parties involved in housing transactions to create a strategy that will increase the affordability index. The data in this research is gathered using mixed methods in which the qualitative is used in the 5 interviews with the property experts and questionnaire as the quantitative method with 206 respondents limited to Generation Y who have fixed income every month and are willing to have a house in Jakarta. The data then further processed using PLS-SEM analysis. This research finally found that Generation Y’s preferences are divided into four categories which are product specifications, future considerations, supplemental factors, and dweller characteristics (stated in sequence from the most influential to the least influential). In terms of affordability, according to five banks with lowest interest rate, BTN as well BRI and Mandiri have become the most affordable bank for Generation Y to do KPR because the indexes were 4.41% (can afford) and 95.59% (cannot afford) or the highest compared to BJB and BCA.