Property News · August 11, 2016

Why are expats still not buying Indonesian property?


Few takers for Indonesian real estate despite loosened regulations on foreign ownership
The Jakarta skyline. Image credit: Muhammad Rasyid Prabowo
The Indonesian government’s intense courting of foreign property buyers seems relatively fruitless.
Despite President Joko Widodo’s announcement last year that Indonesia would allow expatriates to buy a landed house or apartment on a right-to-use basis, an expanded form of leasehold that lasts at least 30 years, “there are yet to surface reports of expats buying Indonesian property,” according to Indonesia-Investments.
In response, Widodo’s recently appointed trade minister Enggartiasto Lukita proposed that the titling of all apartment high-rises as right-of-use or “hak pakai” be mandatory. This way, local institutions, loathe to admit property with a right-of-use title as collateral, can improve mortgage access to expats.
More: Why Indonesia’s millennials are demanding more from real estate
Foreigners are currently eligible for property only above a certain price range — to be paid in 100 percent cash. In Jakarta, properties for expats are set at a minimum price of IDR10 billion (USD763,000) for houses and IDR5 billion (USD381,000) for apartments.
In Bali, where the threshold starts at IDR 3 billion (USD229,000) and IDR 2 billion (USD153,000) for houses and apartments, respectively, some foreign business owners have capitalised on a reported exemption from the restriction on freehold.
Read next: How has Singapore’s real estate market changed in 51 years?

Source : property-report.com
Read more…Why are expats still not buying Indonesian property?

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