Indonesia’s property market is filled with optimism in 2024. This positive outlook is fueled by some factors, including steady economic growth, increasing purchasing power, and supportive government policies. Let’s dig in into the key drivers shaping this encouraging trend for the property and real estate sector.
Opportunities for Indonesia Property Business
Indonesia’s economy is projected to maintain a stable trajectory in 2024. The government anticipates a growth rate of 5.2%, bolstered by both domestic and global economic conditions. This positive outlook is echoed by the International Monetary Fund (IMF), which acknowledges the opportunities presented by Indonesia’s robust 5.05% growth in 2023 for various industries, including property.
Real estate investments further solidify this optimistic view. Data reveals a significant increase in investment within the property sector. From January to September 2023, investments in housing, industrial zones, and office spaces reached a staggering Rp 83.7 trillion, surpassing the Rp 80.5 trillion recorded in the same period in 2022. These figures paint a clear picture: the property market is attracting substantial interest and continues to be a viable investment destination.
Indonesian Government Supports Property Business
The Indonesian government is actively playing its part in fostering a conducive environment for the property sector’s growth. This commitment shows in several key policies:
- Tax Incentives: incentive in the form of Government-borne Value Added (PPN DTP) which started to take effect in November 2023. It offers a significant incentive for potential homeowners that allows individuals to acquire a new landed house or apartment without incurring tax, making property ownership more accessible. Additionally, the program can be re-utilized by those who previously benefited from the PPN DTP incentive in 2023.
- Focus on Housing Backlog: Recognizing the substantial housing backlog in Indonesia, the Real Estate Indonesia (REI) proposes a “propertinomics” approach. This approach advocates for a dedicated Ministry of Housing and Urban Development, along with supportive policies and increased budget allocation for housing projects. The aim is to bridge the housing gap by reducing the backlog by 1 million units annually.
Steady Demand in Property Business
Beyond these positive indicators, fundamental market forces are also contributing to the property sector’s resilience. Here’s a closer look at some key dynamics:
- Steady demand for housing: The demand for housing, particularly among first-time homebuyers, remains a constant force. This is fueled by Indonesia’s growing population and urbanization trends.
- Increasing purchasing power: As the Indonesian economy strengthens, people’s purchasing power is on the rise. This translates to a larger pool of potential buyers with the ability to invest in property.
- Savings on the rise: Data from the Financial Services Authority (OJK) reveals a significant increase in people’s savings held in banks. This presents an opportunity for property developers to educate and encourage potential buyers to consider property, particularly landed houses, as a lucrative investment option due to the high and consistent demand for housing.
Promising Future for Property Market
Strong economy, more investment, and support from the government are making Indonesia’s property market look promising in 2024. Lower taxes, plans to build more houses, and people having more money to spend are signs that the property market is likely to keep growing. If you’re thinking about buying a house or investing in property, it’s important to stay up-to-date on government policies, the most updated regulations, what’s happening in the market, and the best places to put your money.
Simplify Your Real Estate Journey
Seven Stones Indonesia can help you with everything you need to get started in the real estate industry. We can provide you with the best property listings in excellent locations, represent you during negotiations and transactions, and complete due diligence and meet all legal requirements.
Investing in the real estate sector doesn’t have to be confusing because Seven Stones Indonesia can ease the process. Have you already found the ideal land or building in a good location? Contact us now if you need help to proceed to the next step. Our experienced consultants and our comprehensive services can provide you personalized solutions to meet your investment needs in Indonesia.