Indonesia’s Property Market Sets Optimistic Tone for 2024 Amid Political Landscape

property market
property market

The property market in Indonesia sets its sights on a more promising trajectory as the calendar turns to 2024, despite the backdrop of a political year, marked by the public’s pivotal decision on the country’s leadership come February 14. This optimism is buoyed by the government’s positive outlook, with GDP anticipated to hover around the 5.2% mark.

Bank Tabungan Negara Limited (State-Owned Enterprise) Public stands firm in its confidence, finding encouragement in the multifaceted dynamics shaping the 2024 real estate sector. “We harbor optimism in the government’s 5.2% GDP growth forecast.

Considering the ongoing growth at approximately 4.94% to 4.95%, reaching 5% by year-end, we observe robust GDP expansion supported by the consumption patterns of our populace,” shared Nofry Rony Poetra, Bank BTN’s Finance Director, as quoted from an IDX Channel video on Thursday, December 14, 2023.

Real estate growth, aligning with the GDP trends, has manifested a commendable increase of around 2.2% until the third quarter of 2023. Building upon the GDP trajectory, real estate is poised to achieve an expansion ranging from 2.5% to 2.75%.

Nofry expanded on their perspective, noting that considering the growth targets set by Bank Indonesia (BI) at 10% to 12%, they anticipate surpassing the 2023 figures in 2024, aiming for a growth rate between 11% and 13%. This growth trajectory is expected to receive substantial support from the burgeoning credit dynamics.

Deputy Group CEO Investment International Tech and Emerging at Sinar Mas Land, Ferdinand Sadeli, shares the sentiment, asserting that Indonesia’s property business is on an upward trajectory. He links the ascent in commodity prices directly to the surge in property values. For the Indonesian property market, three crucial facets—access, facilities, and infrastructure—are imperative, ensuring the appreciation of property values.

Examining sales data from six prominent property companies in Indonesia, a consistent upward trend emerges from 2017 to 2023. The average Compound Annual Growth Rate (CAGR) during this period ranges between 2.85% and 3%.

“This substantiates the ongoing growth in the property sector, indicated by the 3% figure. Although varying, some sectors exhibit modest increases, while others demonstrate more substantial growth,” Ferdinand observed during a discussion on Permata Bank’s YouTube channel on October 4, 2023.

As a developer, Ferdinand expresses a high level of optimism regarding the prospects of the property business in 2024. This sentiment echoes the broader outlook of players in the industry, signaling a positive trajectory for Indonesia’s real estate landscape in the coming year.