The allure of owning property in Indonesia has drawn an increasing number of foreign nationals, contributing to a robust growth in the national property sector. Bali and Jakarta have emerged as the most desirable locations for expatriates seeking property investments in Indonesia. In the first quarter of 2024 (January-March), there was a notable rise in demand from foreign nationals for various property types, including landed houses, land plots, and apartments.
Marisa Jaya, Head of Research at Rumah123, highlighted this trend in a press release on Monday (1/4/2024). Quoted from Kompas, she explained that over the past decade, the Indonesian government has made property ownership regulations for foreign nationals more flexible. This shift has opened new opportunities for the property industry to attract foreign buyers.
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During the first quarter of 2024, the highest search interest among foreign nationals was for residential properties priced between Rp 1 billion and Rp 3 billion, accounting for 34.7 percent of searches. Properties priced between Rp 400 million and Rp 1 billion followed at 25.7 percent, while properties above Rp 5 billion saw a significant 18 percent of the search interest.
Throughout 2023, the ten most popular areas for foreign property seekers included South Jakarta, Badung (Bali), and Tangerang (Banten), followed by Bandung, West Jakarta, Batam, North Jakarta, Denpasar, Central Jakarta, and Surabaya.
Demand for property from foreign nationals surged in Badung, Bali, with a 92.1 percent increase compared to 2022. Denpasar saw an 81.3 percent rise, Surabaya increased by 49.6 percent, and North Jakarta by 46 percent year-on-year.
“The growth in property demand from foreign nationals in 2023 has accelerated significantly compared to 2022. We expect the foreign national market to further drive the growth and progress of this industry in 2024,” Marisa stated.
In 2023, the most sought-after property types by foreign nationals included landed houses, land, and apartments. Interest in landed houses ranged from 47.4 percent to 68 percent. Meanwhile, searches for land ranged from 6.7 percent to 21.8 percent, and for apartments from 9.7 percent to 25 percent.
Several countries showed a higher proportion of apartment searches, such as South Korea (19 percent), Thailand (17.8 percent), Canada (18.9 percent), India (25 percent), and China (22.4 percent). Chinese property seekers also showed a relatively high interest in warehouses, at 7.4 percent.
The majority of foreign nationals searching for property in Indonesia
The majority of foreign nationals searching for property in Indonesia came from Singapore (21.9 percent), followed by the United States (16.1 percent), Australia (11.8 percent), Malaysia (8.9 percent), and Japan (4 percent). This was followed by individuals from 14 other countries, including Taiwan, Cambodia, Hong Kong, South Korea, Saudi Arabia, the United Arab Emirates, Thailand, Canada, the Philippines, Turkey, India, Qatar, China, and New Zealand.
Marisa added that the trend of increasing property demand by foreign nationals has been ongoing since 2022. This trend was spurred by the issuance of the Minister of Agrarian Affairs and Spatial Planning/National Land Agency Head’s Decree No. 1241/SK-HK.02/IX/2022 in September 2022 concerning the Acquisition and Price of Residential/Housing for Foreign Nationals, as well as the introduction of the Second Home Visa at the end of December 2022.
South Jakarta, one of the central business districts (CBDs), has become a favorite choice for foreign nationals searching for property. The area is well-equipped with various supporting facilities, an established environment, and a modern community that caters to expatriates’ needs.
Badung is also favored as a popular destination for international tourists. The region’s popularity is bolstered by its location as the entry point for tourists via Ngurah Rai International Airport and the extensive development of commercial and tourism areas, along with the trends of digital nomadism and working from anywhere (WFA).
Tangerang ranks third among the favorite areas due to its proximity to industrial zones and being the closest area for foreign nationals working in the western part of Java Island, such as Cilegon, Cikande, and Serang. The limited facilities and support areas in these regions drive foreign nationals to choose Tangerang and its surroundings for living, entertainment, and other activities.
The ease of property ownership for foreign nationals has also encouraged them to legally purchase properties using their personal identities. Previously, some foreign nationals bought houses or residences in Bali using Indonesian citizens’ identities, often leading to disputes over legitimate ownership.
The rising demand for property among expatriates, especially in Jakarta and Bali, is a testament to the growing attractiveness of Indonesia’s property market. The flexibility in property ownership policies and the strategic locations like Jakarta and Bali have significantly contributed to this trend.
