Indonesia has exhibited stable economic growth in recent years, leading to a flourishing local real estate market. In this article, we will delve into the most popular destinations for foreigners, discuss which ones offer the most potential and explore the primary reasons for their property acquisitions in the country.
Content:
- Reasons behind foreigners’ interest in Indonesian real estate
- Best directions for property purchase
- Profitability of investments in Indonesian real estate
- Buying property in Indonesia
Reasons behind foreigners’ interest in Indonesian real estate
In 2022–2023, those contemplating property purchases in Turkey shifted their attention to Asian markets. Challenges in obtaining residency permits and the escalating prices in what was once-popular destination for foreigners led investors to explore alternative opportunities. The first half of 2023 witnessed a sharp increase in the number of visits to Indonesia, with around 3.4 million visitors arriving by the early September. The country attracts foreigners not only for leisure but also for real estate acquisition, driven by several factors:
- Favourable climate
- Good quality of life at relatively low prices
- Attractive investment opportunities.
The surge in buying activity across Asian countries was influenced by changing preferences among foreigners and shifting geopolitical conditions. More individuals expressed a desire to permanently relocate or spend a specific period in a peaceful environment within a nation boasting a stable economy. Many acquired “second homes,” particularly convenient for professionals and entrepreneurs capable of working remotely.
According to experts, not only has the number of applications for property acquisition in Indonesia increased, but the budget for these purchases has also risen. On average, individuals are willing to spend up to USD 220,000 on real estate. They are primarily interested in major cities like Jakarta and resorts such as Bali, particularly in apartments within residences and hotel complexes in Sanur and Canggu, as well as villas in Seminyak.
Best directions for property purchase
Indonesia, an archipelago comprising over 17,000 islands, represents a promising destination for foreign investors. Each region of the country has its unique features and the right choice of location depends on the ultimate goal, preferred lifestyle, aspirations and comfort requirements.
In Indonesia, there are so-called first-tier cities – Jakarta and Surabaya. They have gained the status of megacities due to high GDP per capita and easy access to infrastructure. The optimal choice of a place to live in Indonesia depends on individual preferences. For those seeking maximum dynamism, the mentioned megacities are the best option. On the other hand, Bali and Bandung are perfect for those who appreciate a more relaxed atmosphere.
In picturesque urban centres like Jakarta, life is bustling, with elite shops, regular festivals and international events to be found here.
Meanwhile, tranquil beach towns such as Seminyak, Canggu and Ubud on the island of Bali or the serene location of Lombok offer a more measured pace, ideal for relaxation. These coastal areas are usually chosen by beachgoers, surf enthusiasts and water sports lovers. Despite the relatively low overall cost of living in Indonesia, it can vary depending on the region. Large cities like Jakarta are usually more expensive, especially in tourist areas. Before buying property, assessing your budget and the desired standard of living is essential.
It is worth noting that there are quite a few foreigners in Indonesia, but their numbers may vary depending on the region. Bali, especially in Ubud, Seminyak and Canggu, as well as Jakarta, is known for its cosmopolitan expatriate communities.
The presence of a large foreign community can help establish social connections and provide valuable information about cultural nuances and local customs. Regarding healthcare, in major cities like Jakarta, there is a wide range of medical institutions with numerous hospitals that meet international standards.
In small towns and on the islands, the choice of medical services is more limited, which should be considered by individuals with specific needs.
Profitability of investments in Indonesian real estate
Currently, both residents and foreigners are investing in real estate in Indonesia due to the high return on investment (ROI). Property investments can sometimes yield annual returns ranging from 20% to 30%. When acquiring property for subsequent resale during the development phase, it is sometimes possible to earn up to 40–50% due to the appreciation of finished properties.
One of the reasons why investing in real estate in Indonesia promises such high returns is that this country is poised to become one of the leading global economic centres in the coming years. It is expected that the Indonesian real estate market’s volume will grow from USD 61.22 billion in 2023 to USD 81.24 billion by 2028 at an average annual growth rate of 5.82%. This makes the country particularly attractive to foreign investors.
Thus, you can recoup your investments within the first 10–12 years if you acquire property on a leasehold (Hak sewa) for 25 years. Before the contract expires, you will receive a stable income. Moreover, you can always extend the long-term lease agreement at your discretion.
Buying property in Indonesia
The high return on investment (ROI), potential for sustainable rental income and a variety of offerings, including houses, villas and apartments, all make Indonesia a popular place to invest in real estate. Our platform serves as a convenient real estate aggregator, featuring listings only from verified developers and agencies. You can find suitable housing options in both the “tropical paradise” and the dynamic megacity – it all depends on your preferences. Use the filters on the website and choose from the presented options that are most relevant to you. We wish you success in finding high-demand real estate for relocation or investment. Prices are conveniently listed in different currencies for your reference.