Simplified regulations have not spurred significant growth in foreign interest in Jakarta’s apartment market.
The Head of Research at Jones Lang LaSalle (JLL) Indonesia, Yunus Karim, highlighted this trend in the Jakarta Property Market Review for Q3 2024, held in Jakarta on Tuesday, 29th of October. For context, property purchases by foreign nationals in Indonesia are governed by Government Regulation Number 18 of 2021, covering Management Rights, Land Rights, Apartment Units, and Registration.
“That’s what we see, indeed. When that’s the case, in terms of foreigners’ purchase [of apartments], maybe several things need to be looked at,” Karim analysed.
According to Karim, the motivations of foreign buyers may need closer assessment – whether they intend to use the apartment themselves or view it primarily as an investment. If their goal is an investment, it may be worth considering whether Jakarta apartments can compete, in terms of value, with those in other international cities. Many foreign buyers have both the means and the option to purchase properties abroad, which may affect their decisions.
Looking at apartment purchases in the Greater Jakarta Area (Jabodetabek) in 2024 thus far, JLL Indonesia’s Head of Advisory, Vivin Harsanto, noted that buyers are particularly drawn to areas with comprehensive transport links, such as Bogor, Depok, Tangerang, and Bekasi.
Harsanto added that Value Added Tax incentives, supported by the government, have further encouraged the sale of ready-to-occupy condominiums.
“As a result, buyers can take advantage of the favourable purchase requirements,” Harsanto remarked.
Despite what appears to be foreigners’ waning interest in apartments in Jakarta, according to Farazia Basarah, currently serving as Country Head and Head of Logistics & Industrial at JLL Indonesia, the Indonesian economy remains projected to grow in the range of 4.7% to 5.5% towards the end of the year. Hence, nationally speaking, Indonesia continues to strengthen its appeal as an attractive investment destination in Southeast Asia.
“Indonesia’s economic stability, coupled with its young demographic, presents promising opportunities for sustainable growth,” said Basarah in a written statement to the press on Wednesday, the 30th of October.