The growth of Indonesia’s residential property prices slowed in the third quarter this year, reflecting slowing demand in line with slowing economic growth, according to Bank Indonesia’s latest survey.

Prices increased 6.5% in Q3 this year compared to the same period last year according the survey. That compared to a 7.4% advance in the previous three month period.

The Residential Property Price Survey, which was conducted by the Indonesian central bank, attributed the slowdown to a stable economic adjustment process which it said is still ongoing and ‘is expected to result in more balanced and sustainable growth.’

More than three quarters of Indonesian property buyers are still dependent on bank loans to purchase their houses, especially those buyers of small houses, the survey showed.

However, potential first time buyers could have been deterred by high interest rates charged on their mortgage and the central bank increased its benchmark rate by 0.25% to 7.75% on Tuesday 18th of November, moving quickly to contain inflation after the government raised fuel prices more than 30%.