The Indonesian property investment in 2024 saw a remarkable growth, with investments reaching IDR 122.9 trillion (approximately USD 7.8 billion). This figure represents 7.2% of the country’s total investment realization of IDR 1,714.2 trillion (approximately USD 108.7 billion). The housing, industrial, and office property subsectors played a significant role in this expansion, making them one of the top five contributors to national investment. Experts view this upward trend as a sign of investor confidence in Indonesia’s real estate market.
Key Drivers of the Indonesian Property Investment Growth in 2024
The sustained growth in Indonesia’s property sector reflects the country’s strong investment climate. Government policies, improved infrastructure, and rising demand for commercial spaces have fueled this momentum. According to Farazia Basarah, Country Head of JLL Indonesia, “The continuous investment growth in Indonesia’s property sector shows that it remains attractive and reflects a positive perception among both foreign and domestic investors regarding Indonesia’s investment climate.”
Looking ahead, experts remain optimistic about the sector’s future. “In 2025, we are optimistic that this sector will continue to make a significant contribution to Indonesia’s economic growth, in line with increasing demand for infrastructure and spaces that support business expansion and evolving lifestyles,” Farazia added, as reported by Tempo.
Increased Foreign Interest in Real Estate Investment
Foreign investors are playing a crucial role in driving property investment growth. In Indonesia, the relaxation of regulations for foreign property ownership has led to increased interest from international buyers, particularly in high-demand locations like Bali, Jakarta, and industrial zones.
In the broader Asia-Pacific region, cross-border property investments surged in 2024, reaching US$23.8 billion—up 43% from the previous year. Investors focused on office and logistics assets in key markets such as Australia, Japan, and Singapore. “Japan remains the most active market in the region, with trade volumes reaching US$10.7 billion in Q4, marking a 145% year-on-year increase due to high demand for logistics and office properties,” according to JLL.
Commercial and Residential Property Sectors on the Rise
Both commercial and residential property sectors saw steady growth in 2024. Investment in office spaces increased as demand rebounded post-pandemic. JLL reported that office investment in Asia-Pacific reached US$48.8 billion, growing 12% year-on-year. South Korea led the office market investment in Q4, driven by lower interest rates for senior loans on prime office buildings.
The logistics sector remained a preferred asset class, with strong demand driving portfolio transactions in Japan, Australia, and India. Yield compression in the logistics sector reflects sustained investor confidence. Domestic and foreign investors continue to see strong potential in Japan’s logistics market due to rising rental prices.
Retail property investment also expanded, increasing by 28% year-on-year. Private capital led investments in Australia’s retail sector, while Singapore’s retail market benefited from stable rental growth. In South Korea, companies focused on value-add opportunities to enhance property value.
Market Resilience and Investment Trends
Despite global economic uncertainties, Indonesia’s property market remains resilient. Investors are adopting value-added strategies to offset rising interest rates, fostering market activity. Stuart Crow, CEO of Capital Markets JLL Asia Pacific, emphasized the region’s long-term stability: “The five consecutive quarters of annual growth for commercial properties in Asia Pacific prove the region’s long-term resilience.”
As global financial conditions evolve, investor sentiment remains strong. “Despite differences across markets, investors continue to find opportunities as valuations stabilize and lending requirements ease,” Crow noted. JLL projects that early movers in 2025 will benefit from lower competition, particularly in office and logistics sectors.
Asia-Pacific Real Estate: A Long-Term Investment Opportunity
Asia-Pacific’s real estate market continues to offer promising long-term investment opportunities. Pamela Ambler, Head of Investor Intelligence JLL Asia Pacific, highlighted: “Despite uncertainty due to U.S. fiscal policies and the Federal Reserve’s decision to maintain interest rates this month, Asia Pacific remains an attractive destination for global investment.”
She added, “With central banks beginning a rate-cut cycle and increasing transparency in the region, Asia Pacific presents strong opportunities for long-term investment and sustainable growth.”
Sustaining Growth in Indonesia’s Property Sector
Indonesia’s property sector remains a key player in the country’s economic development. With investments hitting IDR 122.9 trillion in 2024, the market continues to attract both domestic and foreign investors. The positive outlook for 2025, supported by infrastructure growth and evolving business needs, positions Indonesia as a prime real estate investment destination. As regulations evolve and financing conditions improve, the property market is set for continued expansion.
Source: tempo.co
Image: Creative Images