Jakarta property prices hot up

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For British investors looking for something to add to their portfolio that is a little further afield than a typical European prospect, the Indonesian capital of Jakarta could be a new idea that is well worth looking into.

Previously closed to foreign nationals, the Indonesian property market could be opened up to overseas investors in proposals being considered by the government, which would shake up the way that the property market in the country has worked for decades.

Indonesia is currently undergoing a period of strong economic growth which is clearly demonstrated by the presence of an estimated 45,000 foreign workers, who in turn are responsible for a boom in rental demand for the expensive city centre apartments which surround Jakarta’s main business districts.

Any changes to the law, which are thought to be in the form of new regulations making it possible for foreigners to apply for the purchase of a Building Ownership Certificate (BOC), would push up both rental and purchase prices even further.

Recent figures suggest that demand has pushed rental yields up by as much as 15% over the past year.

Restrictions on the purchase of land would most likely stay in force and the provisions of the BOC would be limited to areas in and around Jakarta, Bali and Batam. Foreign ownership of any qualifying building will also be capped at 40%.

Obtaining a mortgage in the country is subject to strict lending controls from the banks and is a process fraught with difficulties.

So anyone wishing to look into a potential overseas purchase should consider taking advice from professionals on how to send money abroad.

One thing is for sure though – if the new changes are agreed, the region is bound to have a new property boom for those quick enough to get involved.

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Jakarta property prices hot up

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