How much does it cost to buy a house or villa in Indonesia? Overview of the property prices!

Indonesia is a fantastic place to live, especially for foreigners looking for a place to settle or invest. If you’re considering purchasing a property in the country, you may wonder: how much is a house in Indonesia? With a range of housing options available, it’s essential to have a gauge on market prices to make your investment worth it. 

How much does a house in Indonesia cost?

How much a house in Indonesia costs depends on various factors such as location, size, and property type. According to real estate data, the average cost of a house in Indonesia ranges from IDR 500 million ($31,500) to IDR 2 billion ($126,000), although property prices can vary significantly based on the area and property type.

Are houses cheap in Indonesia?

Indonesian house prices are one of the lowest in Southeast Asia, making it a desirable prospect for foreign buyers. However, it’s worth noting that Indonesian property prices can vary widely based on location and type of property. While suburban and rural areas tend to have lower prices, major cities can be more expensive due to their status as business hubs.

What are the best cities to buy property in Indonesia as a foreigner?

Some Indonesian cities are more favorable to purchasing property in Indonesia. Below is an overview of Indonesia’s best cities and areas to buy property.

Yogyakarta

While Yogyakarta may not be as well-known as other major cities in Indonesia, it has emerged as a promising location for property investment. The city offers a competitive edge over other places thanks to rapid infrastructure development and a young and educated workforce. As a result, there has been a significant increase in demand for housing, with many locals and foreigners considering the city as an ideal location to find cheap houses in Indonesia. 

The average price for residential houses is IDR 10.2 million ($643) per square meter, while the average rent price is IDR 36.8 million ($2,318) per year. The gross rental yield on houses in Yogyakarta is 62.3%.

Bali

As Indonesia’s top tourist destination, Bali boasts an impressive range of housing options that are well worth exploring. While living in Bali isn’t cheap, the local real estate market has seen a comeback in demand since the easing of pandemic restrictions and the return of tourism to the island. In addition to stunning natural landscapes and picturesque beaches, Bali is also home to some of the unique house designs in the country. 

How much is a house in Bali, Indonesia? The average price is IDR 14.7 million ($926) per square meter, while the average rent price is IDR 85.1 million ($5,361) per year. The gross rental yield on houses in Bali is 42.4%.

Jakarta

Jakarta is a business center, making it a great place to buy a house for those working there. As a commercial hub, it also has a well-developed infrastructure, a modern transportation system, and world-class amenities, making it easier to access necessities. 

Despite favorable business conditions, house prices in Jakarta can be costly. The average house price in Jakarta is IDR 18.2 million ($1,147) per square meter, while the average rent price is IDR 88.7 million ($5,588) per year. The gross rental yield on houses in Jakarta is 30.9%. Further, the government is already changing the capital city from Jakarta to Nusantara.

Balikpapan 

Balikpapan is a bustling city known for its large oil refineries and stunning beaches that attract locals and tourists. However, the city’s true economic potential lies in its proximity to Nusantara, Indonesia’s new capital city, slated to open in 2024.

As a neighboring city to Nusantara, Balikpapan is poised for significant growth soon, with ongoing infrastructure development. For property buyers, this presents a unique opportunity to take advantage of Balikpapan’s relatively low property prices before the Indonesian house price index in the city inevitably surges once construction is complete and Nusantara opens its doors.

Now is the best time to buy land for sale in Indonesia; the average price for a residential house in Balikpapan is IDR 9 million ($567) per square meter, while the average rent price is IDR 12.9 million ($813) per year.

Lombok

Often dubbed as Bali’s little sister, Lombok presents a promising opportunity for property buyers. With lesser tourist traffic and excellent infrastructure, property prices in the region are relatively cheap, making it a perfect time to purchase a property. As Lombok continues to develop, many anticipate it will become a leading luxury destination, further increasing the value of properties on the island.

Can foreigners buy property in Indonesia?

Foreigners can buy property in Indonesia, although they can’t do so through the most potent ownership title, Hak Milik (HM). This type of ownership is only available to Indonesian nationals. However, foreign nationals (WNA) can buy property in Indonesia in several other ways:

• Hak Pakai (HP): Foreign individuals with KITAS or KITAP can buy a property with the Hak Pakai title. However, foreigners must meet specific requirements, and not all properties are eligible for the HP title. Buying HP property allows foreigners to obtain Indonesia’s Second Home KITAS.
• Hak Guna Bangunan (HGB): Hak Guna Bangunan is a land title that gives foreigners the right to build and own property on land owned by someone else, like an Indonesian national or the state.
• Leasehold: Indonesian leasehold agreements are primarily valid for 25 years and allow foreigners and PT PMAs to invest in Indonesian property that they can use for residential and commercial purposes.
• Investment through PT PMA: Foreigners who want to buy property in Indonesia and generate income through rentals can buy the property with a PT PMA. One of the benefits is that foreigners can obtain an Investor KITAS if they own a PT PMA, which allows them to stay in Indonesia for two years.
• Buying with a passport: In 2023, the Indonesian government announced that foreigners can buy property with just their passport. There are several requirements, such as a minimum investment amount and a maximum land size.

Do you want to buy property in Indonesia? With our expert team, you won’t have to navigate the complexities of the Indonesian market alone. For further information on how we can assist you, kindly drop your details below or email us at [email protected].

3 reasons to invest in real estate in Indonesia

There are three significant reasons to buy real estate in Indonesia:

1. Affordable prices

Investing in real estate is a wise investment as property prices increase. Indeed, the Indonesian average house prices are currently among the lowest in Southeast Asia. By purchasing property now, you can benefit from a rise in land value in the future.

2. Government support

The Indonesian government has taken steps to encourage foreign investment, especially in the real estate sector. The relaxation of foreign ownership laws made it easier for foreigners to purchase property, thus promoting economic growth. The Indonesian government’s commitment to providing incentives for foreign investors underscores the country’s potential as a desirable investment destination.

3. The real estate market is booming

With millions of tourists each year, plus friendly government policies, the real estate market in Indonesia is quite promising. The current climate presents an ideal moment for those foreigners wanting to enter the real estate industry in Indonesia. There is so much potential in accommodation and rentals, ranging from commercial properties to luxurious villas.

Types of property

The Indonesian real estate market offers a variety of property types to choose from. Real estate investors or those who want to buy a house in Indonesia as their holiday home can choose between:

• Houses
• Apartments
• Villas
• Townhouses
• Commercial properties

Houses

A classic house is a popular property type in Indonesia, particularly in suburban and rural areas where land is more affordable.

Apartments

Apartments are a popular housing choice in Indonesia, particularly in major cities like Jakarta, where land values are high. Apartments provide a practical solution to the challenge of urban living, as they offer high-density housing options for more people while providing a range of amenities, including gyms, pools, and 24-hour security.

Villas

While Indonesian villas are often associated with luxurious and expensive vacations, they are surprisingly commonplace and affordable in places like Bali and Lombok. Building high-rise apartments is prohibited in these areas, which has made villas a popular alternative for those seeking upscale accommodation. Villas in Indonesia typically offer a range of amenities, including private swimming pools, tropical gardens, and stunning views. 

Townhouses

Around the world, townhouses are a popular type of residential property. These multi-story homes with shared walls offer an affordable and space-efficient option for those seeking urban living. 

Commercial

As a business hub, prices for commercial properties in Indonesia can be high in prime locations. However, many affordable options are available for small businesses and entrepreneurs. There are tons of retail spaces in shopping malls and business centers. 

Other essential costs to consider when buying a house in Indonesia

There are several additional costs to consider before buying property in Indonesia, such as:

• Legal costs
• Maintenance costs
• Property management costs
• Taxes

Legal costs (notary, lawyer, and licenses)

Aside from the purchase price, a hefty chunk of your budget should be left to legal costs. These costs typically include government taxes, notary fees, and land registration fees. Further, to set up a PT PMA will initially cost between IDR 25 million ($1,575) and IDR 35 million ($2,205) in Bali, and between IDR 15 million ($945) and IDR 30 million ($1,890) in Jakarta. Hiring a qualified legal professional to assist in the entire process is advisable. 

Maintenance costs

Property maintenance costs in Indonesia are lower than in many other countries, but they can still be a significant expense. Property maintenance includes utilities, cleaning, repairs, landscaping, and several others. 

Property management costs

If you are a first-time investor or want a hassle-free investment, using the services of a property management company makes things convenient. Foreigners who own property in Indonesia but are quite often abroad can enjoy the many benefits a property management company offers.

Taxes

You need to pay four taxes when buying property in Indonesia: Land and Building Tax (PBB), Transfer Tax (BPHTB), Value Added Tax (VAT), and Documentary Stamp Tax. You can find more information on taxes in our Indonesian tax guide.

How do you buy property in Indonesia?

Are you looking to buy property in Indonesia? Own Property Abroad can assist you and ensure a seamless and hassle-free property journey. Thanks to our extensive knowledge and local experience in the Indonesian market, we can help with legal requirements, finding suitable properties, negotiating the best deals, and conducting due diligence.

With our expert team, you won’t have to navigate the complexities of the Indonesian market alone. For further information on how we can assist you, kindly drop your details below or email us at [email protected]. Let’s start working on your property success story today!

Conclusion

It’s possible to find an affordable home in Indonesia. Whether you’re looking for a quiet suburban home or a seaside retreat, plenty of options exist. With infrastructures and the transportation system rapidly developing, the cities in Indonesia are slowly becoming interconnected. However, finding your dream home in Indonesia can be challenging for foreigners. Own Property Abroad helps foreigners with the process of finding and buying property in Indonesia.

Frequently Asked Questions (FAQ)