Real Estate in Indonesia

Real estate in Indonesia - the main benefits of buying a home

Indonesia is the largest country in Southeast Asia and the fourth most populous country in the world after China, India, and the US. Due to many factors, it has become an attractive destination for the real estate market.

Real estate in Indonesia - factors that attract investors and typical home buyers

Real estate agencies have spread across Indonesia due to several factors:

• Tourist-oriented nature of the country. Indonesia, despite its vast size, has always been attractive to tourists. Tourism is a lucrative business that investors are willing to invest money in. Accordingly, real estate agencies will get their share of profits.
• Exotic component. In Indonesia, many things are unusual for the inhabitants of Europe and North America-for example, a variety of rare species of animals. Of course, there are special excursions for tourists, during which you can see these animals in their natural habitat, not in zoos. In turn, tourists need accommodation where they can stay in comfortable conditions, and here, it is already a matter for those responsible for the sale of real estate and for investors who are ready to invest in the purchase.
• Historical component. The culture of Asia differs in many ways from the culture of countries in Europe and North America. Indonesia is not an exception in this regard. It is about the way of life of the locals and architecture.

Thus, Indonesia is a beautiful place for foreign investors.

Housing in Indonesia - prices, yields and other factors that motivate investors to buy real estate

Investors are only willing to invest in housing if they realize they will benefit from it. It is common for foreign investors to rent out their homes after they purchase them.

In Indonesia, it is similar. At the same time, the cost of housing in Indonesia differs significantly depending on the region. Accordingly, the profitability also differs. Three areas are the most popular among foreign investors:

So, an investor in Indonesia will benefit in any case. Still, it is essential to know how much real estate in Indonesia costs and the return on investment.

Public transportation is one of the reasons to buy real estate in Indonesia.

As in any other country, real estate in Indonesia is profitable where there is quality public transportation. This factor directly affects the cost of real estate.

First, it is essential to understand that Indonesia is located on several islands, so water and air transportation plays an important role. For many tourists, this is very important; therefore, housing in Indonesia near a port or airport is a big plus for the investor.

But it's not just about transportation between islands. Transportation within cities and along one particular island is much more important for many people.

The present subway is used for public transportation in two cities in Indonesia: Jakarta and Palembang (Sumatra Island). Any investor would benefit from having real estate within walking distance of it. However, the cost of such real estate will be correspondingly higher (as, however, and payback).

In addition, bus service is well developed in big and not-so-big smaller cities. In the period after 2017 (especially for large cities in Indonesia), the number of minibusses and minivans serving urban routes has been reduced to a minimum. The number of BRT (Bus Rapid Transit or Bus Rapid Transit) systems has increased significantly. As of January 2024, there are 17 such systems across Indonesia. At the same time, the longest is 251.2 kilometers long - a record for bus rapid transit networks worldwide.

A rapid bus transit system is a route separated from other traffic with particular infrastructure like stations with pavilions and unique rolling stock. The buses may consist of two or three sections and have doors on both sides to allow passengers to disembark either on the right or left, depending on the design of the platforms.

Since the express bus route is often fixed (all because of the large and clumsy rolling stock explicitly designed to move dedicated lines), buying housing in Indonesia near this kind of line is profitable.

Jakarta also has a well-developed system of urban electric trains, which in many ways perform the function of a surface subway, although they often go to the suburbs.

In addition to classic public transportation, cabs are also standard in Indonesia. For $ $ 1, you can travel a distance of about 20 km. Cabs come in a wide variety, from ordinary cars to mopeds, moto-rickshaws, and bicycle rickshaws. Transport is very maneuverable and cheap, making it popular with tourists.

Climate of Indonesia

Many investors prefer to buy real estate in Indonesia because of the excellent climate. In Indonesia, the temperature almost does not change during the year and is about +26˚C. And all - because Indonesia is located on both sides of the equator, and the climate there is primarily equatorial. Thus, frosts can begin only in the mountains, many throughout the country, at an altitude of one and a half kilometers.

Indonesia's wet season is from October to April. During this season, it rains. The most rainy days are in January, with an average of 26.

The rest of the year is the dry season in Indonesia. July has the fewest rainy days, with an average of only 5.

This climate is beautiful for tourists and, therefore, for investors.

The most crucial point for foreign investors in Indonesia

In Indonesia, the authorities protect the market; therefore, only its citizens can own a home in the country in full ownership. There are several options for foreign investors:

• Hak Pakai is the most unfavorable option. It is suitable only for those who live in Indonesia permanently. The living space is not transferred to the buyer's ownership. The lease is concluded first for 25 years, but then you can extend it up to 100 years. It is essential to realize that such a residential property (and it can only be purchased with this option) can not be rented out.
• Hak Sewa. In this case, a lease for 30 years with an option to extend up to 80 years is also signed with the buyer. The investor can rent out such residential property.
• Ownership through a representative.

Thus, real estate in Indonesia - is a profitable investment for the investor.