Jokowi reelection energises Indonesian real estate sector

Incumbent premier’s final stab at the presidency snaps property stakeholders out of watchful waiting

President Joko ‘Jokowi’ Widodo’s winning bid for another term at the Indonesian presidency has boosted market sentiment in the islands, CBRE reported.

Triumphing over rival Prabowo Subianto, Widodo was officially proclaimed winner of April’s general elections on Tuesday. He will be inaugurated on 20 October.

Jokowi’s victory is expected to result in the “greenlighting of real estate projects” as investors look to capitalise on the continuation of his infrastructure spending schemes, especially in areas outside Jakarta, CBRE predicted.

“Most investors moved into wait-and-see mode well ahead of the election, meaning that market activity has been extremely limited for the past year,” CBRE wrote in its report.

“However, recent months have seen an uptick in land banking, project planning and enquiries for en-bloc assets from local and foreign investors anticipating a Jokowi victory.”

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This will be Jokowi’s second and final term as president.

The completion and development of major infrastructure projects has been a cornerstone of Jokowi’s campaign. His administration spearheaded the opening of the country’s first mass rapid transit (MRT) system in March, in addition to investments in highways, airports, seaports and railways across the archipelago.

“It is hoped the MRT will alleviate the city’s traffic gridlock as well as unlocking new areas for investment and development,” CBRE said in a report.

Jokowi has drawn some criticism over a move to levy taxes on luxury properties, but signs indicate that he will reform regulations related to higher-end homes, benefiting sales activity in upper-tier segments, noted CBRE analysts.

Such measures, however, may not be introduced until 2020, pending the formation of a new administration in late 2019.