The real estate sector in Indonesia is inching closer to explosion, a scenario that will be prompted by a number of indicators, chief among them are the continued growth of the economy and policy measures that mirror of a progressive national governance. An extra boost was provided too by the country’s infrastructure projects of mammoth scale.
Indonesia’s infrastructure initiatives are making the capital Jakarta more accessible to its surrounding suburbs, according to Property Report, adding that the ongoing developments are directly driving up the national economy.
As of June 2018, the archipelago’s GDP recorded a GDP growth of 5.27 percent, which analysts said is a year-on-year expansion that exceeded projections. These solid improvements led to increasing land prices that for the industry means sustained growth trajectory.
A national economy that is roaring its way up will “automatically influence the values of property assets,” the report said, citing a new industry assessment furnished by real estate board DPP REI. That Indonesian land prices are going north point to a general economy that is steady and even getting bigger, the report added.
Favourable Fiscal Environment
DPP REI is likewise convinced that the reforms being rolled out by Indonesian President Joko Widodo are creating an environment that is conducive to growth, which applies to industries across the board, including that of the property market.
In addition, the country’s central bank, Bank Indonesia (BI), has implemented new lending rules that permit new home buyers to secure home loans faster and easier than before. Inevitably, the industry reported of increasing asset acquisitions in recent quarters, a trend attributed to the measures jointly introduced by the government and private lenders.
“Purchases increase because of relaxation from BI, banks and the government,” DPP REI was reported as saying.
Investors’ Confidence Buoyed
It appears too that the present settings make for a good investment move. While the government and lending sectors are teaming up to further strengthen the economy, property investors are lured in by the prospect of gaining entry to a market that promises returns over the long term.
Presently, land prices in Greater Jakarta – mostly spanning Tangerang, Bekasi and Bogor – have been characterised as affordable. At the same time, supplies are in sufficient level, indicating that the identified areas are primed for “long term developments.”