Decarbonization Indonesia's housing sector: Integrative supply-demand analysis and consumer preferences for timber substitution

Indonesia’s housing sector faces a persistent housing backlog alongside heavy reliance on carbon-intensive construction materials. Although timber is widely recognized as a low-carbon material within circular bioeconomy frameworks, its adoption in housing remains limited, and the alignment between housing demand, timber supply, and consumer acceptance is poorly understood. This study aims to quantify national timber demand associated with housing development in Indonesia, assess whether current timber supply can meet this demand, and evaluate the viability of regional supply–demand balance models when consumer preferences are incorporated. The novelty of this study lies in providing the first national-scale estimation of housing-related timber demand evaluated against regional production capacity, demonstrating how the incorporation of consumer preferences reshapes regional feasibility outcomes, and distilling a transferable analytical framework for assessing timber substitution in housing across emerging economy contexts. A mixed-method approach integrates an empirical database of 389 housing layouts, an online consumer preference survey (n = 214), and secondary data on housing needs and timber production to develop and evaluate multiple Model of Supply-Demand (MSD). The results indicate that MSD under timber supply consistently provides reliable strategies, highlighting the need for national regulations to focus on maximizing the absorption of currently available materials. Further regional analysis was conducted and shows the need to adapt regulations to local conditions to optimize strategies. Sensitivity analysis confirms that these strategic insights remain robust under varying market conditions. The study provides a policy-relevant and transferable framework to support low-carbon, timber-based housing transitions in Indonesia and comparable emerging economies.