Jakarta Property Market Shows Resilience in 2024

 

With a new era of government leadership, Indonesia’s property market is set for a fresh wave of growth and optimism. Despite ongoing global uncertainties and lingering effects of the pandemic, Indonesia’s property sector continues to be robust and a hotspot for foreign investors.

Property Sector’s Contribution to Indonesia’s GDP and Economic Growth

Industry experts are confident that the property sector will play a substantial role in Indonesia’s GDP growth by the end of 2024. According to Adrianto P. Adhi, President Director of PT Summarecon Agung Tbk, quoting Liputan6.com

“Property is the locomotive of national economic growth, impacting over 185 related sectors. When demand surges, so does development, creating a ripple effect across these industries.”

In 2023, Indonesia’s Central Statistics Agency (BPS) reported a significant IDR 343.86 trillion contribution to the GDP from the real estate sector alone, which employs between 13 and 18 million people—a testament to its resilience in an uncertain global market.

Indonesia: A Strong Property Market in Asia

Rusmin Lawin, Deputy Chair of the REI DPP for Foreign Relations, highlighted that Indonesia and Vietnam currently lead the property investment space in Asia, quoting Kompas.com.

“If we talk about property investment in Asia, Indonesia and Vietnam have the most potential, with Indonesia holding an edge due to its political stability and larger market size.” said Rusmin in Investor Market Today, Friday (10/25).

Rusmin attributes this investor interest to Indonesia’s large population and abundant raw materials, which together create an attractive market for foreign investment.

“Indonesia has a large market with a demographic bonus and has abundant sources of raw materials. This is what makes Indonesia attractive to investors,” said Rusmin.

Jakarta Property Market Remains Steady

Reporting from INDUSTRY.co.id, JLL Indonesia’s “Property Market Review Quarter III – 2024” reports strong growth in Jakarta’s property market, particularly in the CBD’s Class A office rental sector, where occupancy rates remain around 70%.

Outside the CBD, housing occupancy is steady at 71%, with the highest absorption seen in South Jakarta.

“We note a positive uptick in premium office space, with demand rising consistently since early 2023.” Yunus Karim, Head of Research at JLL Indonesia reports in Kompas.com

Rental rates for Grade A and premium spaces increased by 0.7%, marking a recovery from a long-standing decline since mid-2015. Retail occupancy also remains high, largely fueled by the expansion of F&B and fashion brands.

The condominium market in Jakarta saw increased sales, especially in new projects like Two Sudirman and LRT City Tebet.

Head of Advisory JLL Indonesia, Vivin Harsanto, said that buyers are especially drawn to properties with accessible transportation, particularly in the Bodetabek (Bogor Depok Tangerang Bekasi), areas surrounding Jakarta.

Foreign Investor Interest Expands Beyond Jakarta

Indonesian property ownership is available to both Indonesian citizens and foreign nationals, although the process is more streamlined for locals.

According to Lukas Bong, General Chair of the Indonesian Real Estate Broker Association (AREBI), besides Jakarta, Batam and Bali are top targets for foreign investors.

The proximity of Batam to Singapore makes it an attractive investment location for Singaporean investors.

“Indonesia offers sustainable growth opportunities and attractive portfolio diversification, not only in Jakarta but across various cities,” says Farazia Basarah, Country Head and Head of Logistics & Industrial at JLL Indonesia.

Indonesia’s Sustainable Economic Growth and Policy Support

With economic growth projected between 4.7% and 5.5% by year-end, Indonesia remains a compelling investment destination within Southeast Asia.

“Indonesia’s economic stability, combined with a young demographic, has spurred investor interest across residential, industrial, and data center sectors.” said Farazia as quoted by INDUSTRY.co.id.

Furthermore, government incentives such as Property Value Added Tax Borne by the Government (PPN DTP) aim to make property ownership more accessible, especially for younger buyers, thereby fostering growth in the domestic property market.

The ongoing support from both the government and a vibrant market environment indicates that Indonesia’s property sector will continue to be a major contributor to the economy and a beacon for global investors.

 

Sumber: Detik.com, INDUSTRY.co.id, Kompas.com, Liputan6.com

 

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Andrzej Barski

Director of Seven Stones Indonesia

Andrzej is Co-owner/ Founder and Director of Seven Stones Indonesia. He was born in the UK to Polish parents and has been living in Indonesia for more than 33-years. He is a skilled writer, trainer and marketer with a deep understanding of Indonesia and its many cultures after spending many years travelling across the archipelago from North Sumatra to Irian Jaya.

His experience covers Marketing, Branding, Advertising, Publishing, Real Estate and Training for 5-Star Hotels and Resorts in Bali and Jakarta, which has given him a passion for the customer experience. He’s a published author and a regular contributor to local and regional publications. His interests include conservation, eco-conscious initiatives, spirituality and motorcycles. Andrzej speaks English and Indonesian.

Terje H. Nilsen

Director of Seven Stones Indonesia

Terje is from Norway and has been living in Indonesia for over 20-years. He first came to Indonesia as a child and after earning his degree in Business Administration from the University of Agder in Norway, he moved to Indonesia in 1993, where he has worked in leading positions in education and the fitness/ wellness industries all over Indonesia including Jakarta, Banjarmasin, Medan and Bali.

He was Co-owner and CEO of the Paradise Property Group for 10-years and led the company to great success. He is now Co-owner/ Founder and Director of Seven Stones Indonesia offering market entry services for foreign investors, legal advice, sourcing of investments and in particular real estate investments. He has a soft spot for eco-friendly and socially sustainable projects and investments, while his personal business strengths are in property law, tourism trends, macroeconomics, Indonesian government and regulations. His personal interests are in sport, adventure, history and spiritual experiences.

Terje’s leadership, drive and knowledge are recognised across many industries and his unrivalled network of high level contacts in government and business spans the globe. He believes you do good and do well but always in that order. Terje speaks English, Indonesian and Norwegian.

Per Fredrik Ecker

Managing Director of Seven Stones Indonesia, Jakarta

Per is the Managing Director of the Seven Stones Indonesia (SSI) Jakarta office and has more than 25-years’ experience in Indonesia, China, and Western Europe. He previously worked in senior management positions with Q-Free ASA, Siemens AG, and other companies in the telecom sector. Over the last six years, he has been the Chairman of the Indonesia-Norway Business Council (INBC) and recently become elected to be on the board of EuroCham Indonesia.

His most recent experience is within Intelligent Transport Solutions (ITS), Telecom, and other sectors within the Indonesian market. He is today through his position in SSI and by representing Norway Connect, promoting Nordic and European companies that would like to explore business opportunities in the Indonesian market. He’s also playing an active role to help create the Nordic House concept in Jakarta that will provide an excellent platform for Nordic companies entering Indonesia, where they’ll find a community that can offer support with trusted information and affordable services to enter this market.

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Ridwan Jasin Zachrie

CFO of Seven Stones Indonesia, Jakarta

Ridwan is one of Indonesia’s top executives with a long and illustrious career in the financial world. He holds several professional certifications including being a Certified Business Valuer (CBV) issued by the Australian Academy of Finance and Management; Broker-Dealer Representative (WPPE); and The Directorship Certification for Directors and Commissioners, issued by the Indonesian Institute of Commissioners and Directors.

His experience includes being the Managing Director at one of the top investment banking groups in the region, the Recapital Group, the CFO at State-owned enterprises in fishery industry and the CEO at Tanri Abeng & Son Holding. He’s also been an Independent Commissioner in several Financial Service companies and on the Audit and Risk Committee at Bank BTPN Tbk, Berau Coal Energy Tbk, Aetra Air Jakarta as well as working for Citibank, Bank Mandiri and HSBC. His last position was as CFO at PT Citra Putra Mandiri – OSO Group.

Ridwan has won a number of prestigious awards including the Best CFO Awards 2019 (Institute of Certified Management Accountant Australia-Indonesia); Asia Pacific Young Business Leader awarded by Asia 21 Network New York USA (Tokyo 2008); UK Alumni Business Awards 2008 awarded by the British Council; and The Most Inspiring Human Resources Practitioners’ version of Human Capital Magazine 2010.

He’s a member of the Board of Trustees of the Alumni Association of the Faculty of Law, Trisakti University, Co-Founder of the Paramadina Public Policy Institute and actively writes books, publications and articles in the mass media. He co-authored “Korupsi Mengorupsi Indonesia” in 2009, which helps those with an interest in understanding governance in Indonesia and the critical issue of corruption. Ridwan speaks Indonesian and English.