There are more than enough reasons to buy property in Jakarta. With over 270 million inhabitants, Indonesia is the fourth most populous nation in the world. Jakarta, the capital of Indonesia, has a population of over 11 million. Because of that, there is a high demand for houses and apartments to live in. The number of people in Jakarta is increasing rapidly, driving demand for housing. This increase means a good potential for rental income and long-term capital appreciation. But there are more reasons to buy property in Jakarta.
1. Important economic hub
Jakarta is one of Southeast Asia’s most significant economic centers, and that’s without any doubt one of the major reasons to buy property in Jakarta. Jakarta has a dynamic economy with many businesses, including commerce, manufacturing, and financial services. Most of Indonesia’s leading banks and financial organizations have their headquarters in Jakarta, which serves as the country’s economic hub.
Foreign direct investment (FDI) into Indonesia reached $45.6 billion in 2022, with a significant amount coming to Jakarta, according to figures from the Indonesia Investment Coordinating Board.
2. High demand for real estate
The demand for real estate, including residential and commercial assets, is driven by Jakarta’s robust economic development. The city’s real estate prices have been rising gradually for a while, which is anticipated to continue. Long-term capital growth allows investors to make a significant return on their investment.
Due to the strong demand for rental homes in the city, buying real estate in Jakarta also has the potential to generate rental income. The average monthly rent for a one-bedroom apartment in Jakarta was about IDR 4.4 million ($277) in 2020, while the average monthly rent for a three-bedroom apartment was IDR 15 million ($945).
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3. Growing population
With over 270 million inhabitants, Indonesia is the fourth most populous nation in the world. Jakarta, the capital of Indonesia, has a population of over 11 million. Because of that, there is a high demand for houses and apartments to live in. The number of people in Jakarta is increasing rapidly, driving demand for housing. This increase means a good potential for rental income and long-term capital appreciation.
4. Infrastructure development
Due to Indonesia’s infrastructure investments, Jakarta’s quality of life and business appeal are improving. The government’s improvements to public amenities, water and sanitation, and transportation make the city more attractive to residents and investors.
One of Jakarta’s major infrastructure projects is the 2019 MRT system. The MRT has two lines and 31 stops, totaling 38.4 kilometers. Reducing travel times and traffic congestion has improved the city’s transportation system. In May 2022, the Jakarta MRT reported 1,561,680 MRT users, demonstrating its popularity and efficiency.
The government also invested in the 65-kilometer Jakarta Outer Ring Road (JORR), a toll road that circles the city. The JORR has made Jakarta easier for residents and visitors by improving connectivity and accessibility. The Jakarta-Bandung High-Speed Rail is another infrastructure project expected to boost Jakarta’s real estate. The 142-kilometer Jakarta-Bandung railway is under construction. The 45-minute commute will make it easier for people to commute between the two cities.
The government also funds parks, public buildings, and water and sewage systems. The massive Jakarta Bay Reclamation project aims to build a new central business district and other public amenities. The 4,000-hectare project will add 17 artificial islands to Jakarta’s shoreline.
5. Strategic location
Jakarta’s strategic location makes real estate investment attractive. Jakarta is Indonesia’s gateway, located on Java’s northwest coast. Businesses and investors love its proximity to major international markets. With several major transportation hubs, Jakarta connects to other parts of the country and region. Jakarta’s Soekarno-Hatta International Airport, Indonesia’s largest airport, handles many international and domestic flights. In 2022, the airport served over 66.9 million passengers.
Highways and railways link the city to other Indonesian regions. The Trans-Java Toll Road connects Jakarta to other major Java Island cities, from Merak in the west to Surabaya in the east. Modern railways link the city to Bandung and Surabaya.
6. Cultural attractions
Jakarta’s cultural attractions make real estate investment a good idea. The city is a popular tourist destination due to its rich cultural heritage. The National Museum of Indonesia displays Indonesia’s diverse culture and is a popular attraction for domestic and foreign tourists. The museum has over 140,000 historical, artistic, and cultural items. Locals and tourists visited the museum over 475,000 times in 2019.
The Old Town (Kota Tua) is Jakarta’s popular colonial architecture destination. The Museum of Fine Arts and Ceramics, Jakarta History Museum, and others are nearby. Locals and tourists frequently visit the area’s cafes and restaurants. The city’s street food scene is famous for its affordable traditional dishes. Locals and tourists love Jalan Sabang and Jalan Jaksa for street food.
The Jakarta International Film Festival and Jakarta International Jazz Festival are among Jakarta’s many cultural events. These events draw thousands of visitors and offer real estate investors a chance to profit from the city’s growing tourism industry.
7. Stable political environment
Political stability is crucial for investors considering investment opportunities in any country or city. Jakarta is a politically stable city, making it an attractive destination for real estate investors. Jakarta is located in a democratic and stable Indonesia. Since 1998, democratic elections have peacefully transferred power between political parties. Indonesia was 53rd in the 2019 Economist Intelligence Unit Democracy Index, indicating political stability.
Jakarta’s government has also taken steps to boost foreign investment. The Jakarta Investment and One-Stop Service Agency (DPMPTSP) streamlines and reduces bureaucracy for investors to obtain licenses and permits. The agency received over 5,000 investment proposals worth USD 36.1 billion in 2020, showing investor interest in the city.
How to buy property in Jakarta?
These are the steps for buying or leasing property in Jakarta:
- Start a PT PMA through BKPM to simplify the property purchase process.
- Hire a trustworthy real estate agent to navigate the Indonesian property market, negotiate terms, and protect your interests.
- Find the right property that meets your needs and is in a convenient, tourist-friendly area.
- Verify property licenses by asking the seller for the Property Certificate and Building License/PBG before negotiating or purchasing.
- Conduct due diligence to avoid legal issues and ensure a good investment by checking land ownership, licenses, and reputable real estate agents.
- Sign the Sales Purchase Agreement (SPA) and pay an upfront payment (typically 10-30%).
- Complete the final payment and transfer ownership through a public notary while paying transfer taxes (5% for both seller and buyer) before receiving the Certificate of the Property and all necessary licenses and certificates.
By following the steps outlined in this list, buyers and investors can streamline the property purchase process, negotiate a fair price, and make informed investment decisions. Conducting due diligence, verifying property licenses, and ensuring all legal requirements are met before finalizing any purchase or lease agreement is crucial.
Buy property in Jakarta with Own Property Abroad
Do you want to buy property in Jakarta? Own Property Abroad can assist you and ensure a seamless and hassle-free property journey. Thanks to our extensive knowledge and local experience in Jakarta, 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 real estate market in Jakarta 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!
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Frequently Asked Questions (FAQs)
Are properties in Jakarta expensive?
The cost of property in Jakarta has been rising gradually. It is anticipated to continue due to the city’s robust economic development and growing population. The actual cost of property varies depending on location and property type.
Why do people like to live in Jakarta?
People like living in Jakarta because it offers diverse job opportunities, a vibrant social and cultural scene, good education and healthcare facilities, and a bustling metropolitan lifestyle.
Can foreigners buy real estate in Jakarta?
Yes, foreigners can buy real estate in Jakarta, but certain restrictions and regulations must be followed. Foreigners can own houses and apartments with the correct permits and licenses, such as Hak Pakai.
