With a population of around 3 million people, Surabaya is the second-largest city in Indonesia after Jakarta. The city is the capital of East Java and is known as the ‘City of Heroes’ because of its role in Indonesia’s fight for independence from Dutch colonial rule. Then, but now as well, the city is a hub for international trade. Because of its growing economy, the city is trendy among foreign investors seeking to buy real estate in Surabaya.
Are foreigners allowed to buy and own property in Surabaya?
Foreigners are allowed to buy and own property in Surabaya. However, it is challenging to purchase real estate in the city on the northern coast of Java Island. Foreigners can’t obtain full ownership of land or property. However, foreigners can still buy and use the property in some ways.
There are three different kinds of property ownership in Indonesia. These are Hak Milik (Right to Own), Hak Pakai (Right to Use), and Hak Guna Bangunan (Right to Build). You cannot obtain Hak Milik as a foreigner, so you are left with Hak Pakai and Hak Guna Bangunan.
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How can foreigners buy real estate in Surabaya?
A PT PMA is the safest and easiest option to buy real estate in Surabaya. This foreign-owned company allows foreigners to invest foreign money in Indonesia. The main advantage of the PT PMA is that it’s a legal entity that can obtain real estate ownership through freehold and leasehold. It’s important to note that the PT PMA owns the property and not the owner of the PT PMA (which can be a foreigner). Besides that, you can also use a PT PMA to receive a residency permit (Working KITAS or Investor KITAS).
Once the PT PMA is established, it can request Hak Pakai and Hak Guna Bangunan to buy, build and use the property. These two licenses are required to use the real estate.
6 Steps to buying property in Surabaya
In just 6 steps, foreigners can buy real estate in Surabaya and other popular Indonesian cities and regions.
- 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 real estate prices in Surabaya?
Surabaya can be an exciting city to invest in real estate. Surabaya has several property options, including houses, townhouses, apartments, commercial buildings, and condos. You can also choose to invest in land. With the correct license, you can build your own house or villa. You will find an overview of Surabaya’s average real estate prices in the table below.
|Average buy price||Average price/sqm.||Average rent price||Annual growth||Rental yield|
|House||IDR 2.4 billion ($160.685)||IDR 14.2 million ($950)||IDR 58.9 million ($3.940)||– 3,2%||+ 30%|
|Townhouse||IDR 2 billion ($133.900)||IDR 14.6 million ($980)||–||+ 1,7%||–|
|Apartment||IDR 472 million ($31.600)||IDR 12.8 million ($860)||IDR 34.4 million ($2.300)||– 1,7%||+ 90%|
|Commercial||IDR 3.6 billion ($241.030)||IDR 17.3 million ($1.160)||IDR 118.1 million ($7.910)||– 1,7%||+ 39,2%|
|Condo||IDR 3.4 billion ($227.640)||IDR 18.2 million ($1.220)||IDR 210.6 million ($14.100)||+ 8,6%||–|
|Land||IDR 4.3 billion ($287.900)||IDR 13.2 million ($885)||IDR 120.8 million ($8.090)||+ 4,1%||+ 34%|
Why invest in real estate in Surabaya?
There are several reasons to invest in real estate in Surabaya. The main reason is the economic growth of the city. In the last few years, more and more companies have moved their office to Surabaya. Now the Indonesian government is moving its capital city (Jakarta) to the island of Kalimantan (Nusantara). Experts expect more companies to move to Surabaya, making the city an exciting place to buy real estate. As you can see in the above table, investors could earn an attractive rental rate on their property in Surabaya.
Are you interested in buying a house or land in Surabaya?
Surabaya is a great Indonesian city to buy real estate. There are several ways foreigners can buy and own property in Surabaya. It’s important to remember that a foreigner can never obtain full ownership of Indonesian real estate. But they can establish a PT PMA to obtain ownership through this legal entity. It is recommended to seek assistance from a real estate agent to guide you through the process.
Best real estate agencies in Surabaya
For foreigners who want to purchase real estate in Surabaya, 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 Surabaya. They can guide foreigners through the legal requirements, help identify suitable properties, negotiate favorable deals, and ensure a smooth transaction.
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Frequently Asked Questions (FAQ)
Can a foreigner buy a house in Surabaya?
Foreigners can buy a house in Surabaya, though they can only obtain partial ownership. The best option is through a foreign-owned company (PT PMA), which can get ownership as a legal entity.
How expensive is real estate in Surabaya?
Real estate prices in Surabaya are above average but still cheap compared to Jakarta. As more and more companies move their office to Surabaya, experts expect real estate prices will rise in the following years.
Where to find land or a house for sale in Surabaya?
You can find land for sale in Surabaya by contacting local real estate agents, searching online real estate marketplaces, looking for classified ads in local newspapers and websites, or networking.