Jakarta Attracting Ultra High Net Worth Individuals for Luxury Property Investments

Jakarta and Surrounding Areas Attracting Ultra High Net Worth Individuals for Luxury Property Investments

Jakarta and its surrounding areas have become a popular destination for affluent foreigners, particularly those from South Korea and Australia, who are seeking to purchase luxury property investments.

According to the Wealth Report 2023 released by Knight Frank, Indonesia is one of the top 10 preferred countries for Ultra High Net Worth Individuals (UHNWIs) – individuals with a net worth of over US$30 million or Rp461 billion from South Korea and Australia – to buy luxury property investments.

Syarifah Syaukat, Senior Research Advisor at Knight Frank Indonesia, stated that UHNWIs are targeting premium apartment units and premium landed houses, with end-users being the dominant segment.

“The [apartment] units that are commonly sold are located in South Jakarta and Central Jakarta, with the end-user segment still dominating,” said Syarifah as quoted on Tuesday (14/3/2023).

According to the Jakarta Property Highlight report, the average price of premium apartment units in Jakarta is Rp57 million per square meter.

The facilities that are sought after include a high-end image of the area, 24-hour security, complete facilities, high-tech, and luxury.

Meanwhile, premium landed houses that are in demand among the crazy rich are located in the hinterland area, including in the west Jakarta corridor.

However, in general, the premium residences that are in demand are located in elite areas, either in the central business district (CBD) or prime non-CBD.

Based on the TWR 2023 report, Syarifah explained that currently, HNWIs in Asia consider property investment to be the best investment amid inflation and also the safest asset value at present.

“The preferences of UHNWI Australia and South Korea who choose Indonesia as one of the regions to buy homes are expected to boost the performance of the premium residential market in Indonesia,” she said.

Furthermore, she observed that there is currently a positive sentiment growth in the market reflected through the confidence of premium home buyers that the economic and political situation is conducive and will continue to be under control.

On the other hand, according to the Asia Pacific Prime Residential Index report released by Knight Frank Asia Pacific in the second half of 2022, the Asia Pacific region experienced a 0.4 percent year-on-year (YoY) growth in premium home prices compared to last year.

“Jakarta itself has a growth rate of 0.9 percent YoY, which is relatively higher than the average growth rate of premium residential prices in the Asia Pacific region,” she explained.

Meanwhile, the average selling price in the premium condominium sector in Jakarta increased by 1-2 percent compared to the previous semester.

Although the condominium market is currently in a challenging phase, the market continues to roll and is confident enough to make price adjustments.

This condition cannot be separated from the continuous positive economic growth and positive sentiment from HNWIs who have begun to move to make investments since the beginning of this year.