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Indonesia Residential Real Estate


Forecasts indicate that Indonesia will continue to grow and surpass 77 billion U.S. dollars in residential real estate transactions by 2028, making it one of the top countries with the largest value of residential real estate transactions. The performance of this booming market has also been aided by the steady decline in mortgage interest rates following the COVID-19 outbreak. With over 270 million inhabitants, the country ranks fourth in the globe in terms of population. Rapid urbanization is also driving up demand for residential real estate throughout the archipelago.

Indonesian Homeownership

Just about 5% of Indonesian households live in rental dwellings, making house ownership the predominant housing type in the country. In spite of this, the nation is still facing an approximately 13 million unit housing shortage in 2023, which primarily affects low-income household. Certain provinces have higher percentages of slums than others due to uneven development throughout the archipelago. Moreover, obtaining bank loans presents difficulties for individuals who aspire to become home owners, especially considering the majority of Indonesians work in informal jobs. However, the majority of real estate developers rely on internal money to finance their projects, which when combined with skyrocketing land costs, can hurt smaller developers and reduce the amount of housing available in the nation.

Policies and initiatives related to housing

To address the shortage of housing and rising real estate demand, the Indonesian government has put in place a number of initiatives. These include lowering key interest rates, establishing the One Million Houses program (Program Sejuta Rumah), which aims to build a housing finance liquidity initiative (Fasilitas Likuiditas Pembiayaan Perumahan/FLPP), and million homes every year. Between 2022 and 2023, the adoption of housing financing liquidity made it possible to finance over 455 thousand housing units, or 51 trillion Indonesian rupiah. Moreover, the Indonesian primary housing market was impacted in 2023 by the government rule that offered VAT rebates for the purchase of new residential units.
The government has recently adopted a legislation to further encourage foreign investment through the Golden Visa, which gives residency through investment, in response to the rise in foreign direct investment in recent years. Although foreigners are not allowed to own all of the property in Indonesia, they are able to obtain the necessary documents to lease (Hak Sewa), build (Hak Guna Bangunan/HGB), and use (Hak Pakai/HP) real estate for a longer period of time. This initiative is particularly influential in metropolitan and tourist areas like Jakarta and Bali, making it easier for foreign nationals to settle. This policy is expected to bring a positive impact on property investment and demand across the country.


The residential property price index in Indonesia from the third quarter of 2021 to the fourth quarter of 2023 has gradually increased, reaching a value of 108.15 index points as of the fourth quarter of 2023. Land in Indonesia can only be owned by Indonesian citizens. However, if the building has a strata title status, non-Indonesians can also own an apartment or office space but not the land on which it stands.

The total value of mortgage loans appears to be increasing over the period. The value starts at around 545 trillion rupiah in January 2022 and reaches over 600 trillion rupiah in May 2023. There are some fluctuations throughout the period, but the overall trend is upwards.

The value of residential real estate transactions in Indonesia has fluctuated somewhat since 2017, but there appears to be a general upward trend.






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