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Indonesian Government Discussing Changing Foreign Investment

By Allison Halliday | July 29, 2015

According to Knight Frank LLP, residential real estate prices on Bali increased by 15% last year, making it one of the hottest island property markets in the world. In comparison prices of villas on the Spanish island of Ibiza rose by just 5% while in Sardinia they decreased by 8%.
It is anticipated that these types of gains will continue as recently the Indonesian government began discussing revisions to rules enabling foreigners to directly own luxury homes in Indonesia. Real estate brokers expect considerable interest from Singapore and China once these revisions are completed. Buyers from these countries have plenty of money but in the past have been less interested in purchasing property in Indonesia due to being unable to buy a home freehold. At the moment foreigners are able to get around owning property in Indonesia by either structuring the purchase as a long-term lease, or by using local citizens as proxies.


According to the article in, the government will be working with the tax offices and immigration offices to carry out these revisions. Indonesia is regarded as being one of the largest Asian markets in terms of population and land mass and real estate experts to feel there is plenty of room for it to grow.

In particular, Jakarta is very close to Singapore and many Singaporeans also work in Indonesia as it’s only about an hour’s flight from Singapore. Property prices in Jakarta which is the Indonesian capital rose by 11% in March compared to a year earlier. The amendments being proposed by the government will only allow foreigners to buy luxury apartments as they will still be unable to purchase a landed property. It is expected that these changes will enable foreigners to purchase property of at least 2153 ft.², costing a minimum of 2.5 billion rupiah which is equivalent to $185,000.

It’s widely anticipated that any revisions will help balance out the slowdown in economic conditions. Experts point out that real estate transparency and clarity in any policies is vitally important for increasing transactions and that demand will probably rise if these revisions make things clearer.

Photo Courtesy of denysabri pixaby

Allison Halliday is a Realty Biz News contributing writer. She handles International Real Estate and is a seasoned blogger.
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