Indonesia is blessed with buoyant industries. It is successful in sectors like agriculture, tourism, manufacturing etc. It currently has one of the highest GDP in the region. This is why visitors rush to Indonesia. Some visit to tour while other want to invest.
Real estate in Indonesia is very sought-after. This is because of visits from tourists who want to explore and have fun. Migration from other countries also contributes. This is because people who are moving to Indonesia need a place to live. The constant demand for real estate keeps the market on a steady growth. If you are interested, you should buy property in Indonesia for investment.
Buying property in Indonesia for aliens
Many countries have rules protecting foreign investments. Indonesia is no exception. The country has something called Hak Milik. It translates to ‘Right to Own’ in English. It is a freehold ownership, strictly for Indonesians. This is the government’s way of giving its residents a chance to also invest. This does not mean that an alien is barred from investing. If an outsider wishes to buy property in Indonesia, there are certain regulations:
Hak Pakai/Right to Use: This gives aliens the right to purchase and make use of a property. However, the individual must have a residency permit in Indonesia to qualify for Hak Pakai. For someone who wishes to live in Indonesia, this is a good option.
Purchase through Leasehold: Foreigners can buy real estate in Indonesia through a leasehold agreement. This means that the property does not completely belong to you. However, you have ownership over it for a specific period. A lease is valid for 25 years. The agreement can be extended to up 80 years. This way of investing is cost-effective.
Through PT PMA: The full meaning is Perseroan Terbatas Penanaman Modal Asing. It is a foreign investment company in Indonesia. A PT PMA is allowed to own both leasehold and freehold properties. It also allows you to have a 2-year residency permit. Establishing a PT PMA is a long process. It takes around 6 weeks to 10 weeks in Indonesia.
Buy with a Passport: Recent legislation in Indonesia allows visitors to buy a property with just a passport. You do not need an investment company or a residency permit for this. However, property purchase has a minimum value. The region you are buying from determines the value.
Categories of real estate found in Indonesia
The categories of property that an individual can invest in are two. They are:
1. New Development: This is also known as off-plan buildings. They are houses or apartment complexes that are still under construction. Many developers put units up for sale before it is completed. This option is great if you are not in a hurry to use your flat. It is often cheaper than buying a finished apartment. This means you have the chance to make higher profits if you decide to resell.
2. Completed Buildings: Just like the name says, these are buildings that are finished. They are completely built and ready for immediate use. This could be an apartment unit in a residential complex. It could also be a villa or a townhouse. You may buy a completed building if you are ready to move in. You may also buy the property if you want to rent it out immediately.
Both off-plan buildings and finished buildings have their advantages. They are suited to different purposes. It is therefore important, for you to examine your needs at the time of the purchase. This will help you to determine if an off-plan unit fits best. You would also know if you’re better off with a completed flat.
Overview of properties in Indonesia
According to Indonesia-real.Estate, property here is cheaper other Asian countries. They’re also more affordable than some European countries as well. Although the prices of properties are not fixed. They depend on location as some areas are more vibrant. They vary based on the property itself; the number of rooms and how big they are. Another factor is the amenities such as supermarkets, gyms, pools, parks, and so on.
The average cost per m² is $1,430. You may get a 1-bedroom flat for about $75,000. Budget the sum of $150,000 for a bigger apartment.
The cost of a villa largely depends on location and size. For example; Bali and Jakarta feature the highest-priced villas due to their vibrancy. You will need at least $500,000 to buy a villa in Indonesia.
A townhouse is a house where you share a wall with other people. However, there’s a personal yard and parking lot. The cost of townhouses also vary based on location, closeness to the sea, size and so on. Also, there is a threshold of cost that a foreigner must match when buying houses. While this threshold also varies, a foreigner must buy a house for at least $95,000.
Penthouses in Indonesia are a great option if you like comfort and privacy. They can have up to two floors. They are often located in vibrant parts of cities. Therefore, you don’t have to worry about access to infrastructure. The expected cost of a penthouse in Indonesia is about $135,000.
Invest in Indonesia real estate
Real estate in Indonesia is profitable. This is because of the steady growth it witnesses. There are many ways to invest in Indonesian properties. You have the option to choose between off-plan and completed properties. You may buy a flat under construction and resell it when it is completed. This earns you about 30% or more profit on your investment. You may as well choose a long-term investment. This is either through renting out the house or waiting for a couple of years before you resell. Either way, profit is sure on your investment.
