Indonesia’s property market is experiencing a dynamic shift, driven by government reforms, foreign investment, and ambitious national housing initiatives. The sector remains a key engine for economic growth, contributing IDR 343.86 trillion to the nation’s GDP in 2023 alone and supporting between 13 and 18 million jobs. Industry experts, including Adrianto P. Adhi of PT Summarecon Agung Tbk, emphasize that property acts as the “locomotive of national economic growth,” influencing over 185 related industries through its ripple effect.
Jakarta’s property market has shown resilience in 2024, with strong performance in the Class A office rental sector, where occupancy rates remain around 70% in the Central Business District (CBD), and housing occupancy steady at 71%. Demand for premium office space has been consistently rising since early 2023, and rental rates for Grade A and premium spaces have increased by 0.7%, marking a recovery from a long-term decline. The condominium market has also seen increased sales, particularly in new projects like Two Sudirman and LRT City Tebet, with buyers favoring properties offering accessible transportation, especially in the Bodetabek area surrounding Jakarta.
Beyond Jakarta, foreign investor interest is expanding to other regions. Batam and Bali remain top targets, with Batam’s proximity to Singapore making it particularly attractive for Singaporean investors. The government’s relaxation of foreign ownership laws, particularly through the Omnibus Law on Job Creation, has made it easier for foreigners to acquire property using a Right to Build (HGB) title, a significant development described as a “game changer” by Terje H. Nilsen of Seven Stones Indonesia. Foreigners can now own property for up to 80 years through a Right to Use (Hak Pakai) or HGB title, provided they hold a valid residence permit (KITAS or KITAP). Minimum property value thresholds apply, with Jakarta requiring a minimum of IDR 3 billion, Bali and Bandung between IDR 2 billion and IDR 2.5 billion, and lower thresholds in other regions.
A major catalyst for investment is the government’s ambitious 3 million affordable homes initiative, championed by President-elect Prabowo Subianto. This plan, which aims to build 3 million houses annually, is backed by four prominent Indonesian tycoons and has attracted significant foreign investment, including a commitment from Qatar to invest in 1 million affordable homes, primarily vertical housing units. The government has also extended its tax exemption for home purchases through December 2024 to stimulate the domestic market. Furthermore, the government is leveraging seized land from corruption convicts to meet national housing demands, with plans to build 250 homes on 2.5 hectares donated by the Housing Minister.
The development of major infrastructure projects is also fueling interest. The construction of the MotoGP Indonesia circuit and ancillary infrastructure in Mandalika, Central Lombok, is a key driver for investment in the region. Similarly, the massive marina redevelopment on the island of Flores is designed to welcome yachts, ferries, and cruise ships, enhancing the island’s appeal as a luxury destination. These developments, combined with the government’s pro-business policies and a young, growing population, position Indonesia as a leading property investment destination in Asia, with experts noting its political stability and large market size as major advantages over other regional players.
