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Expats in Jakarta now allowed to own real estate
| Published: | 23 Nov at 6 PM |
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Tagged: Property Abroad
The popularity of Indonesia’s capital, Jakarta, has already caused soaring rents in central areas popular with expats.
A proposed relaxation in the law which forbids foreigners from owning property may push rents and property prices even higher. Landlords with high-end rental apartments in or near the city’s business districts are already reaping dividends due to the surge in expat interest in Indonesia, with rentals rising 15 per cent since the start of 2013.
It’s feared that, should the proposed measures be implemented in law, the rising demand for rentals may shift to similar demands for purchases, destabilizing the housing market.The government’s proposals would allow expats to purchase a Building Ownership Certificate, although ownership of land would still be forbidden to foreigners.
According to Fraser & Co’s Asian head of operations, Neil Jensen, the new rule will only apply to specific properties, with foreign ownership of the qualifying building limited to 40 per cent. Colliers International research director Ferry Salanto agreed that the growing expat demand for upscale rental apartments had given a sign to Indonesia’s government that owning homes was the next step for expats.
Salanto believes that expats with their own homes would contribute to the economy through taxes and improvements to their properties. At this point, the sticky issue of foreigners owning land in Indonesia is holding up the introduction of the proposed new rules, due to become effective last June.
According to a British expat resident in Jakarta, a seperate issue which may hold back a rush to buy and the stimulation of the property market is the unavailability of home loans or mortgages. Banks in Indonesia are traditionally unwilling to give loans to foreigners.
A proposed relaxation in the law which forbids foreigners from owning property may push rents and property prices even higher. Landlords with high-end rental apartments in or near the city’s business districts are already reaping dividends due to the surge in expat interest in Indonesia, with rentals rising 15 per cent since the start of 2013.
It’s feared that, should the proposed measures be implemented in law, the rising demand for rentals may shift to similar demands for purchases, destabilizing the housing market.The government’s proposals would allow expats to purchase a Building Ownership Certificate, although ownership of land would still be forbidden to foreigners.
According to Fraser & Co’s Asian head of operations, Neil Jensen, the new rule will only apply to specific properties, with foreign ownership of the qualifying building limited to 40 per cent. Colliers International research director Ferry Salanto agreed that the growing expat demand for upscale rental apartments had given a sign to Indonesia’s government that owning homes was the next step for expats.
Salanto believes that expats with their own homes would contribute to the economy through taxes and improvements to their properties. At this point, the sticky issue of foreigners owning land in Indonesia is holding up the introduction of the proposed new rules, due to become effective last June.
According to a British expat resident in Jakarta, a seperate issue which may hold back a rush to buy and the stimulation of the property market is the unavailability of home loans or mortgages. Banks in Indonesia are traditionally unwilling to give loans to foreigners.
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