Balikpapan is a big city located on the east coast of Borneo in the province of East Kalimantan. The city, known as the Oil City, is famous for its large oil and gas reserves. Where it once was a small fishing village, it is now a major industrial city in Indonesia. The city is also close to Nusantara, which will become Indonesia’s new capital by 2025. Because of that and its important industry, many foreigners want to buy real estate in Balikpapan. In this article, you will read if foreigners can purchase land and property in Balikpapan and, if so, how they can.
Can foreigners buy land and property in Balikpapan?
Foreigners can buy land and property in Balikpapan, such as houses, apartments, and commercial buildings. Though it is possible to buy real estate in Balikpapan, it might take a lot of work. National law and regulations protect Indonesia’s housing markets against foreign investors, although there are still several ways foreigners can buy property in the Oil City of Borneo.
Buy real estate in Borneo, East Kalimantan
Balikpapan is located on the island of Borneo in the province of East Kalimantan. Still, the rules and regulations that apply to Balikpapan also apply to other cities on the island of Borneo. In some cities and regions, some local restrictions apply. Always seek advice from a local real estate company to know local regulations.
Indonesia has three kinds of property ownership, which are Hak Milik (Right to Own), Hak Pakai (Right to Use), and Hak Guna Bangunan (Right to Build). Hak Milik is the highest form of property ownership, though foreigners cannot obtain Hak Milik. This means foreigners must find another way to buy property in Balikpapan and other Indonesian cities and towns.
Get help with buying property in Balikpapan
How can foreigners buy real estate in Balikpapan?
PT PMA stands for Perseroan Terbatas Penanaman Modal Asing and is a foreign-owned company. Foreigners can buy freehold and leasehold real estate with a PT PMA, as it is an official Indonesian entity. When a foreigner buys property with a PT PMA, the company owns the property, not the foreigner.
Using a PT PMA to obtain a Working KITAS or Investor KITAS is also possible. A foreigner can reside in Indonesia for up to 24 months with this visa. The PT PMA can obtain Hak Pakai and Hak Guna Bangunan. These licenses are needed for using and building the land and property.
6 Steps to buy real estate in Balikpapan
Balikpapan can be a great location in Indonesia for real estate investment. Foreigners can buy real estate in Balikpapan and other cities on the island of Borneo by following these six steps:
- Establish a PT PMA (a notary, accountant, or visa agency can do this for you).
- Request the certificate for the property you want to buy from the Indonesian National Land Office (BPN).
- Settle the payment and provide proof.
- Provide proof that the conditions for Hak Guna Bangunan or Hak Pakai are met.
- Request the building permit (PBG) to acquire the right to build.
- BPN will issue the property certificate under the name of your PT PMA.
What are the land and real estate prices in Balikpapan?
You see an overview of the real estate prices in Balikpapan in the table below.
|Average buy price||Average price/sqm.||Average rent price||Annual growth||Rental yield|
|House||IDR 535 million ($34,775)||IDR 9 million ($585)||IDR 12.9 million ($839)||– 2.6%||–|
|Commercial||IDR 4.2 billion ($273,000)||IDR 28.9 million ($1,879)||IDR 13.9 million ($904)||+ 4.3%||–|
|Land||IDR 2.5 billion ($162,500)||IDR 3.2 million ($208)||–||– 39.5%||–|
Why invest in real estate in Balikpapan, East Kalimantan?
There are several reasons to buy real estate in Balikpapan. Firstly, the city is well known as a significant oil and gas hub, making it a bustling center for business and commerce. Many large multinational companies in the city create a thriving economy that could drive up the demand for real estate in the area.
Another reason Balikpapan is an attractive investment location is its proximity to Nusantara, the new capital city of Indonesia. Nusantara is being developed to replace Jakarta as the new seat of government, and Balikpapan is located relatively close to this new capital. Additionally, the Sultan Aji Muhammad Sulaiman Airport in Balikpapan is expected to become the main airport for Nusantara, potentially increasing property values in the city.
Are you interested in buying a house or land in Balikpapan?
Are you considering buying real estate in Balikpapan? Balikpapan presents an exciting opportunity for real estate investment, with the city’s status as a major oil and gas hub and its proximity to the new capital city of Indonesia being just two of the many factors that make it a compelling choice for potential investors.
Best real estate agencies in Balikpapan
For foreigners who want to purchase real estate in Balikpapan, seeking assistance from a reputable local real estate agent can be a smart decision. Agents have the local expertise, market knowledge, and legal understanding necessary to navigate the intricacies of the real estate process in Balikpapan. They can guide foreigners through the legal requirements, help identify suitable properties, negotiate favorable deals, and ensure a smooth transaction.
Get help with buying property in Balikpapan
Frequently Asked Questions (FAQ)
Can a foreigner buy a house in Balikpapan?
A foreigner can buy a house and land in Balikpapan through a PT PMA. Leasing property or buying real estate through an Indonesian nominee is also possible. However, these two ways are not recommended to foreigners.
How expensive is real estate in Balikpapan?
Real estate prices in Balikpapan are low compared to other major Indonesian cities, such as Jakarta and Surabaya. These low prices make Balikpapan an exciting option for investment to foreigners.
Where can I find land or a house for sale in Balikpapan?
You can find land and houses for sale in Balikpapan on local marketplaces, local real estate agencies, advertisements in local newspapers, and on websites. You will also find good real estate deals by networking with people that live in Balikpapan.