Indonesia is set to become a new economic powerhouse in Southeast Asia, luring more investors from overseas.
Increasingly more foreign buyers, especially from China, have spotted investment opportunities in Indonesia’s real estate market. I personally believe that Indonesia will become more and more interesting, once we see more regulatory changes to foreign ownership of property.
Before you make any investment decisions, it’s important that you understand how healthy the market is, and where we are in the market cycle. In this article, I explain how Indonesia’s property market has performed the past years and what my predictions are for 2019.
Indonesia’s property market in 2017 & 2018: A throwback
Indonesia’s property market has slowed down the past years, after experiencing a sharp growth from the end of 2012 and throughout 2013. The Federal Reserve Bank of St. Louis has an illustrative graph showing the price changes, and the decline starting in 2013.
As shown, the average price increase has slipped from 14% in 2013, down to around 3% in 2017 and 2018.
There are four main reasons for this decline: