Housing prices in Indonesia: How much does real estate cost?

Real estate in Indonesia is a popular choice among foreign buyers, attracted by the friendly lifestyle in the country and relatively affordable housing costs. Although housing prices in Indonesia, especially in Bali and Jakarta, remain stable amid global economic uncertainty, the long-term prospects for the real estate market seem justified. Quarterly data from the central bank shows that by 2024, residential property prices in Indonesia have increased by only 0.1%, indicating market resilience in the face of rising interest rates. Over the past decade, property prices in Indonesia have seen moderate growth of just 16%. However, the actual value of real estate in Indonesia has decreased by 5.9% when accounting for inflation and the weak performance of the rupiah. Indonesia's economic fundamentals remain strong, with GDP growth estimated at around 5% annually for the next few years according to the IMF and World Bank. Key factors in Indonesia's real estate market, such as tourism, are recovering, with international visitor arrivals doubling compared to the previous year. The government has also introduced incentives for housing construction and VAT exemptions to stimulate demand. Although property taxes in Indonesia remain high for foreign owners, recent policy changes allow foreigners to own apartments with more secure property rights, which may attract more investment. Foreignreal estate buyers in Indonesia enjoy high rental yields averaging 5-6%, reasonable property valuations, a growing mortgage market, and political stability. But is buying real estate in Indonesia right for you? Our guide covers the average property prices in Indonesia overall, as well as housing prices in specific cities like Jakarta and the Bali housing market.

Average housing prices in Indonesia

In Indonesia, average housing prices vary significantly depending on the location and type of property. Here are some key points about pricing:

• Small houses in the remote suburbs of Jakarta start at around 150 million IDR (10,500 USD).
• Middle-class family homes on the outskirts of Jakarta or Bali cost between 300 to 800 million IDR (approximately 21,000 to 56,000 USD).
• Luxury villas in prestigious areas typically cost between 2 to 5 billion IDR (approximately 140,000 to 350,000 USD).
• Villas on the first line in Bali can cost from 10 billion IDR (700,000 USD) and up.
• Real estate in Indonesia that has just been built has a premium of 10-20% compared to resold homes.

The cost of real estate in Indonesia

The price you pay for housing largely depends on where you are buying. Location is the most important factor that will determine the price of real estate. Overall, Jakarta is the most expensive city in Indonesia for purchasing a home.

Other factors affecting real estate prices in Indonesia

The prices of houses in Indonesia can vary significantly, and you need to know how much the property will cost before you buy it. Several important factors that determine the value of real estate in Indonesia include:

• The location - apartments and houses in the central areas of Jakarta and on the coast, like Bali, have the highest real estate prices in Indonesia.
• The location in the center of major cities or on an exclusive beach provides owners with easy access to amenities, entertainment, and scenery. This advantageous position creates high demand, which increases property values.
• The size of the plot - larger and more spacious plots directly translate to higher real estate prices in Indonesia.
• Amenities - Indonesian houses and apartments with features such as swimming pools, gyms, parking, and 24-hour security demand higher selling prices and rental income.

Additional housing expenses in Indonesia

In addition to the sale price, other costs associated with purchasing property in Indonesia include:

• Transfer and notary fees amounting to 5% of the sale price.
• The commissions for real estate agents are around 2-3%.
• Legal fees for contracts.
• Repairs, renovations, furniture, and appliances.

Restrictions on foreign buyers in Indonesia

Indonesia has complex rules regarding foreign property ownership. The main options are:

• The lease term is up to 70 years, renewable.
• Purchase through an individual owner or a legal entity in Indonesia.
• Free ownership after living for more than 10 consecutive years.

If you are buying property in Indonesia as a foreigner, it is highly recommended to consult with a real estate professional. The laws in developing markets are not always what they seem and can change rapidly.

Risks and costs of real estate in Indonesia

The Indonesian housing market has significant potential for foreignreal estate investors who take the time to understand its nuances. The country boasts stunning natural landscapes and affordable apartment prices compared to much of Asia. Recent policy changes also allow foreigners to have greater ownership of property in Indonesia, enabling them to purchase apartments in designated economic zones. However, the market has complex regulations that require professional guidance for navigation. Foreigners cannot directly buy land, such as houses or villas in Indonesia - the primary option is leasehold rights for 70 years.