Today, investors are increasingly choosing real estate in cities in Indonesia to invest money and generate passive income. The warm southeastern country, consisting of thousands of islands, is popular not only as a resort region, but also as a good place for investing in housing and relocating. If you want to become an investor, acquiring real estate is the most affordable passive income strategy.
Content:
- Where is the best place to buy a property in Indonesia?
- Is it profitable to rent in Indonesia?
- Is it worth buying real estate in Indonesia?
- We will help you buy real estate in Indonesia!
The population of the country is on the rise, and resort regions are developing and becoming more and more appealing to tourists. The market of property in Indonesia is undergoing rapid growth, which allows investors to receive a very good income.
However, there are some specific aspects of purchasing a home in the southern country. For example, buyers of off-plan houses or apartments in Indonesia are not protected by the law. As a result, all the risks associated with under-construction properties are incurred by the future owners. That said, reselling local housing allows you to earn 30–60% of the original cost, and in some especially popular locations, the price of an apartment after the building is commissioned can double. In addition, unfinished projects are rare in the country. Local developers tend to hand over housing in time. Let’s review the best cities in Indonesia to move to and invest in real estate.
Where is the best place to buy a property in Indonesia?
Indonesia is a country of contrasts, where amazing pristine nature and modern megacities with skyscrapers and well-developed infrastructure are side by side. One of the most famous and densely populated islands is Bali, which is a popular tourist region. If you want a home by the sea and are wondering where is the best place to live in Indonesia, then feel free to choose Bali. It boasts beautiful beaches, high-quality resort infrastructure, cultural attractions, and friendly people.
Popular cities in Bali
The busiest cities and towns in Bali are located in its southern and central parts. Here are some of the popular tourist locations:
- Ubud is a city in the central part of the island. It is surrounded by mountain gorges and picturesque rice terraces. It is home to many artists, wood and stone carvers, and jewellers. The housing market offers a multitude of off-plan projects at a bargain price. For example, you can acquire a house in a premium new development with a swimming pool for $225,000. The starting price of a small apartment is $52,000.
- Denpasar is the capital of the province of Bali and the most populous city in the island. It has a lot of traditional handicraft markets and beautiful temple complexes. There are off-plan projects in Denpasar where apartments are for sale starting at $170,000.
- Kuta is a famous resort village in Bali. It boasts beautiful beaches, an abundance of restaurants, cafes, and nightclubs. This is an ideal place to buy investment rentals. In Kuta, apartments in high-end residential complexes start at $300,000.
- Seminyak is a resort area in the southern part of Bali. The tourist business is well developed here; there are opulent hotels, clubs, and restaurants. Luxurious sandy beaches are suitable for both swimming and surfing. An off-plan townhouse in Seminyak is for sale for $180,000.
Jakarta
Jakarta is the country’s capital and largest city. It is situated in the northwestern part of the island of Java. The densely populated metropolis is attractive not only as a travel destination but also as a place where you can find a job in a big company. Here, ancient buildings and narrow streets coexist with modern skyscrapers and shopping malls. Jakarta has many cafes, restaurants, retail outlets, as well as an amusement park, a zoo, an aquarium, etc. The international airport is 18 km from the capital. There are large textile factories in Java, so you can purchase high-quality clothes at very affordable prices.
The metropolis of Jakarta caters to those who plan to do business or work in one of the local companies. Modern housing can be found in the business district. New apartments are located in multi-storey gated communities with swimming pools, spas, gyms, and other amenities. The starting price of a unit in a new development is $140,000.
Surabaya
Surabaya is the second largest city in Java after Jakarta. It is a metropolis with a population of about 4 million people. It is home to the largest Indonesian port, an international airport, major industrial enterprises, and financial centres of the country. Surabaya is quite a lively city but more relaxed compared to Jakarta. It is mainly inhabited by locals, while tourists only transit through.
Surabaya is good for those who plan to do business in shipping and industry and for employees of large companies who want to live close to a business centre. A small townhouse in a modern residential development in Surabaya is for sale starting at $136,000.
Is it profitable to rent in Indonesia?
In Bali, which is the country’s main tourist destination, the rental market directly depends on the flow of travellers. There was some stagnation during the pandemic. Nevertheless, many remote workers and freelancers now more frequently choose this warm island to live in, which brings the owners of Bali rental villas an annual income of 5–6%.
Nowadays, tourist traffic has almost recovered. In the summer of 2023, mandatory COVID-19 vaccination certificates, which were previously a prerequisite for travelling to the island, were removed. The occupancy of rental properties is currently approaching 90%, and experts share an optimistic outlook and predict an even greater increase in the number of tourists. Today, the Bali authorities are striving to develop the resort region’s infrastructure to attract overseas visitors. It is expected to get an additional airport, a cruise ship terminal, a Formula 1 racetrack, and many other facilities, which will make Bali an even more popular place to holiday and live.
What is a profitable property to rent in Indonesia?
The maximum rental yield in the country can reach 15% per year. You typically get high returns from properties located in resort regions and rented short-term. One of the most popular locations is Bali.
What is the best city to buy an apartment in Indonesia? Choose the most visited resort towns of Bali and you will see that rental housing here can bring good profits.
When starting a rental business, you should consider apartments and villas in Indonesia that:
- are near popular tourist locations: beaches, shopping outlets, good restaurants, and coffee shops;
- have an exclusive exterior and interior;
- are part of residential developments with a swimming pool, gym, private garden, spa, and other amenities;
- are in an area with good transport accessibility or in a unique location (overlooking rice terraces, mountains, etc.).
Is it worth buying real estate in Indonesia?
The island nation is one of the most attractive destinations to purchase real estate. Its economy is among the fastest growing in the world. Inflation rate, however, is lower than in European countries. The infrastructure of the islands is gradually developing, and life here is becoming more and more comfortable. Here are the biggest advantages of buying a property in Indonesia:
- When purchasing an off-plan property, the price can be 30–60% lower than the market price, which will allow you to resell it at a profit in the future.
- In large residential developments, you can purchase a rental property, which is managed by a specialised company and allows you to receive a passive income of 9–15% per year.
- There is a wide range of housing, and everyone can find their perfect unit, whether it is an exclusive villa with mountain views or a modern apartment in a busy metropolis.
We will help you buy real estate in Indonesia!
Foreigners are allowed to acquire an apartment only through a long-term lease agreement. The exact period for which the right to use the property is granted is determined individually. As a rule, it ranges from 20 to 30 years and is extendable. The maximum term of a long-term lease is 80 years.
Another homeownership option is HGB, or right to build. Its validity can be up to 80 years or more. To obtain this title, a foreign national needs to register as a legal entity and formalise the right to build a property. A foreigner can resell a house with an HGB title to an Indonesian, who automatically receives ownership.
The catalogue on our website contains current listings of real estate in the Indonesian islands. For your convenience, offers from developers, real estate agents, and individuals are collected in a single database. We have both off-plan projects and move-in ready properties.
A convenient search system allows you to easily and quickly select interesting real estate options for a future purchase and compare prices from different developers and companies. Using filters, you can browse apartments and houses by neighbourhood, price, number of bedrooms, total area, and many other criteria.