Indonesian Real Estate market is expected to growth at CAGR 5.04% from 2026 until 2034 from 100.4B to 156.2B forecasted (USD) with 58% residential dominating the market. This cause by monetary easing that expected to expand middle class purchasing power, other than that affordable housing initiatives by government and FLPP will expanding Indonesia real estate market share.
Indonesia mortgage market is set to expand significantly with total mortgage loans expected from 46B in 2024 to 70B in 2030 (USD) this become pillar in Indonesia Housing Market. This expansion are came from income growth, controlled labor costs and young domestic population. Overall Indonesia mortgage are expected to growth significantly with the government support and also public demand in the housing market
This program highlight government commitment to affordable housing providing a large demand to the Industry with BBTN as the major player. PT Bank Tabungan Negara (Persero) Tbk (BBTN) is a state-owned bank specializing in retail and mortgage services. Its core mission is facilitating homeownership for Indonesia's low-to-middle-income segments through government-aligned housing finance programs. Highly sensitive to national economic conditions, the bank continuously adapts its lending and savings portfolio to meet evolving market and regulatory demands.
Based on relative valuation by using Price to Book ratio, we valued BBTN.JK with target price on 2360 by calculating average Book value from 2025 - 2028F, times it to 1.2 lowest average of price to book industry ratio (1.2 - 4.8), and time it to uncertainty factor of 70%. By doing that we believed this can be robust valuation.