Emerging stronger: Indonesia’s residential market soars amid global economic flux

The country’s housing sector thrives, defying economic uncertainties and drawing increased investment

The apartment market is showing signs of opportunity, with the current environment seen as an ideal “time to buy”. AsiaTravel/Shutterstock

Indonesia’s residential market is poised to continue its robust performance throughout 2024, despite facing delays in interest rate cuts. As The Business Times reports, analysts predict strong demand for landed residential properties, buoyed by government incentives and a growing middle-income group. 

Nixon Napitupulu, president-director of Bank Tabungan Negara (BTN), noted at a recent seminar in Jakarta that demand for new landed houses, particularly in suburban areas, is expected to remain strong. He said that BTN experienced a 12 percent growth in loans last year, primarily due to purchases in the 200 to 550 million rupiah range. 

Indonesia’s presidential election this month is not expected to significantly impact homebuying decisions. Furthermore, Bank Indonesia’s residential property survey showed a 1.96 percent year-on-year increase in new-housing market prices, indicating strength in this sector. 

In addition to residential growth, the apartment market is also showing signs of opportunity, as indicated by Colliers. The current environment is being seen as an ideal “time to buy,” with the market dominated by end-users and developers focusing on clearing unsold stocks. This has led to stable prices and an emphasis on sales through attractive discounts and promotions. 

The Indonesian government’s recent relaxation of rules on foreign ownership of property has also injected new vigour into the real estate market, as noted by The Business Times in a separate report. Jakarta Setiabudi Internasional (JSI Group) has been exploring growth opportunities following this policy change. Chandra Asali, a JSI Group director and board member, highlighted that the easing of property ownership rules, aimed at boosting foreign investment, now allows foreigners to buy property under the same conditions as locals. 

At the 18th PropertyGuru Asia Property Awards Grand Final 2023, Indonesia’s achievements in the property sector were well-recognised, with developers from the country securing eight regional wins. These included awards for Best Breakthrough Developer (Asia) for PT Sinar Mitbana Mas, Best Mega Township Development (Asia) for BSD City by Sinar Mas Land, and Best Wellness Residential Development (Asia) for The Zora by PT. BSD Diamond Development, showcasing the country’s prowess in diverse real estate developments. 

Overall, the Indonesian real estate market, particularly in Jakarta and Bandung, is garnering increased interest following the launch of the high-speed rail linking these cities. Despite rising property prices over the past decade, the government’s consideration to extend the maximum home mortgage tenor to 35 years reflects ongoing efforts to make housing more affordable for lower-income households. 

Know of any award-worthy residential, commercial, or industrial projects in the country? Nominate them for the 10th annual PropertyGuru Indonesia Property Awards on or before 31 May 2024. To know more, visit AsiaPropertyAwards.com/Award/Indonesia/. 

Gynen Kyra Toriano, Digital Content Manager at PropertyGuru, wrote this article. For more information, email: [email protected].