Analysis of Generation Z's Housing Affordability and Preferences Based on Price to Income Ratio in Jakarta Region

Abstract

The uprising trend of house pricing in Indonesia has become a much-discussed phenomenon. This particular issue brings a new problem, especially for Indonesian Gen Z that live in a big city like Jakarta, where they are struggling to find a home they can afford. This research will discuss Gen Z's housing preferences and affordability in having a house, using the price to income ratio in Jakarta. The method used in this paper is derived from Pradana (2020) and several other research related to preferences and housing affordability. Gen Z housing preferences' scope will mainly focus on aspects like the dweller's characteristics, product specifications, future considerations, and other supplemental factors, while the affordability aspect will be measured using Bourassa (1996) model. The results of this paper show that the most important variable for Gen Z is the product specifications. Moreover, the affordability limits (AL) that are derived from the interest rate and term of loans from 5 banks that are being used in this research do not really affect the affordability index of Gen Z or become a pivotal factor.

Keywords: Generation Z; Housing Preferences; Affordability; Price to Income Ratio