Indonesians go to the polls tomorrow (Wednesday) to elect a new president, with one candidate intending to allow foreign property buyers to purchase luxury units priced at least IDR2.5 billion (S$265,000) in larger cities and on Bali.
Presidential candidate Joko Widodo, known as Jokowi, suggests the move will boost tax revenues. Currently foreigners are not legally permitted to own property in Indonesia in their own name, but the use of a spouse, agent or trusted friend is common.
According to local media reports the possible opening of Indonesia for foreign investment in the luxury property market is considered surprising. With property prices still relatively low compared with Singapore and Hong Kong, the market is expected to become attractive for foreign investment if and when opened up.
Setyo Maharso, a member of Jokowi’s campaign team, was also quoted in local media last weekend as saying that foreigners will be able to buy property of at least 200 sqm in larger cities (such as Jakarta, Surabaya and Makassar) and on the islands Bali and Batam where many foreigners reside.
JLL had previously forecasts further slowing this year in the Indonesian property markets amid uncertainty ahead of tomorrow’s tight presidential election.
Image: The Jakarta skyline: Kevin Aurell from Indonesian Wikipedia
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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