Indonesia's real estate sector can become a leading investment destination in the global marketplace

Indonesia's real estate sector can become a leading investment destination in the global marketplace

Currently, Indonesia has all the chances to reach and surpass economic giants such as Germany and the United Kingdom. At least some forecasts suggest the reality of such developments by the middle of the century. The world has already witnessed various forms of "economic miracles" that brought developing countries to the forefront of the global economy within a few decades.

At the same time, Indonesia is already an economy to be reckoned with, boasting annual GDP growth of over 5% and the ability to be a global factory. The country is getting richer, and the wealth of its people is increasing. The World Bank predicts that there could be more than 780,000 new economically active and financially capable households in Indonesia by 2045.

For the real estate market, the main driver is the increasing wealth of Indonesian households and the growing population. This creates demand for new housing from people who can afford to improve their living conditions. At the same time, the construction sector is showing a slowdown in the pace of new housing construction, which will naturally lead to price increases in the coming years.

Nevertheless, property prices in Indonesia are relatively affordable under current conditions. In the central areas of a typical Indonesian city, the average price per square meter of real estate is around $1,600. The above projections are decades away from being realized, and today only 1 in 5 households in the country can afford to buy a home on the market. In other words, demand pressure has not yet translated into a noticeable increase in prices.

At the same time, the country's authorities continue to work on creating incentives to attract international buyers to the domestic market. Although foreigners do not yet have full rights to own property in Indonesia, specific steps are being taken to facilitate their access to real estate. New types of visas have been introduced for investors and buyers, such as the "Second Home" Visa, which is issued for up to 10 years to people with a stable income and savings of more than $130,000. Millionaires can take advantage of a separate "Golden Visa".

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