Southeast Asia’s property investment market is booming, with a 16% year-on-year increase reported across the region. This Southeast Asia property surge highlights renewed investor confidence, driven by strong domestic consumption, growing digital economies, and strategic export diversification.
Within this positive regional trend, Indonesia stands out as a major beneficiary, poised for accelerated economic growth in 2025.
Southeast Asia’s Property Surge Reflects Regional Strength
The Southeast Asia property surge reflects broad regional strength and resilience. According to Cushman & Wakefield, as cited by idxchannel.com, countries like Singapore, Malaysia, and Indonesia led this 16% increase, supported by diversified supply chains and booming digital sectors.
Investors are particularly focused on industrial properties, logistics hubs, and data centers, responding to changing global demand. As Southeast Asia’s economic fundamentals remain strong, real estate investment across the region continues to gain momentum.
Indonesia Benefits from Southeast Asia’s Property Surge
Indonesia directly benefits from the Southeast Asia property surge through several economic drivers. Cushman & Wakefield Indonesia noted, “Overall, the economic conditions appear conducive to boosting property demand in 2025, although the performance of each market segment will still be influenced by their unique trends (such as the hybrid work system).”
Indonesia’s economic growth projection stands at 5.1% for 2025, backed by stable inflation at 3% and a reduced fiscal deficit of 2.7% of GDP. With more than 70% of the population under 40 years old and rising investments in technology and infrastructure, Indonesia is positioned for significant economic gains.
Read More: Why Property Investment in Indonesia Remains a Safe Bet for 2025
Sector Trends: Office, Retail, and Logistics Outlook
Sector-specific trends in Indonesia reflect cautious optimism. In the office sector, vacancy rates are expected to improve as no new office supply will enter the market in 2025. Office rents are projected to rise after the anticipated period of political stability, supported by recovering demand and a positive economic backdrop.
In retail, a new project covering 92,600 square meters will add supply by the end of 2025. While overall occupancy may dip slightly due to this new space, Cushman & Wakefield stated, “Rental rates and service charges are expected to remain stable, with a moderate increase of 0.4% projected for service charges in 2025.”
For the logistics sector, warehouse vacancy rates are expected to remain stable despite strong competition, with new supply reaching approximately 380,000 square meters. Meanwhile, in the residential sector, government policies are supporting stability. The decision to delay the planned VAT increase to 12% and the continuation of 100% VAT subsidies for homes priced under IDR 5 billion will stimulate home buying, especially among first-time buyers.
Future Opportunities Driven by Infrastructure and Policy
Several infrastructure and policy developments are set to drive further growth. The completion of MRT Jakarta Phase 2A by 2027 positions 2025 as the ideal time for developers and property owners to plan new commercial and residential projects along the Thamrin-Kota corridor. Supporting retail spaces, condominiums, and small offices are among the top opportunities.
Additionally, Bank Indonesia lowered the benchmark interest rate to 5.75% in January 2025, positively impacting mortgage rates. As Cushman & Wakefield explained, “This move is one of the factors encouraging developer optimism in providing new housing supply, as mortgages remain the most preferred payment method, especially for landed homes.”
Government policies targeting five priority sectors which include natural resources, basic industries, services, skilled labor, and technology-based industries — will also stimulate the industrial and logistics sectors. While Jakarta’s new mall developments will slow, retail expansion is expected to accelerate in Greater Jakarta, driven by rising consumer demand.
Read More: Indonesian Property Investment in 2024 Hits IDR 122.9 Trillion
Indonesia Positioned for Continued Growth
Indonesia’s real estate market benefits from the broader Southeast Asia property surge and favorable domestic conditions. Ongoing infrastructure projects, government support for housing, and stable macroeconomic indicators position Indonesia for continued growth. Investors looking toward Southeast Asia’s rising property markets will find Indonesia particularly promising in 2025 and beyond.
Source: idxchannel.com, realtalkasia.com
Image: TIRTO/Andrey Gromico