'Revised Real Estate Bill Allowing Ownership
Equal Housing Purchase Rights for Indonesian Citizens
Expanded to Foreign Nationals and Overseas Corporations'
[Asia Economy Jakarta Correspondent Choi Su-jin] Indonesia has taken measures to open its real estate market to foreigners. This move is interpreted as an attempt to seek an economic breakthrough through real estate amid a continuing economic downturn. As a result, foreigners are expected to be able to purchase housing in Indonesia.
According to local media such as The Jakarta Post on the 20th, Sofyan Djalil, Minister of Agrarian Affairs and Spatial Planning, emphasized right after the omnibus bill passed the parliament that "foreigners will have the same rights as local Indonesian real estate buyers," making real estate purchases possible.
Earlier, the Indonesian parliament included provisions allowing foreigners to own real estate as part of an omnibus bill bundling dozens of laws aimed at economic revitalization. A government official evaluated this as "a major turning point to overcome the economic downturn caused by the spread of the novel coronavirus disease (COVID-19)."
Until now, foreigners could only purchase apartments, not general houses, in Indonesia. Also, ownership was possible in the form of a 30-year usage right within Indonesia, with an additional 20-year extension possible, but foreigners were not allowed to use real estate usage rights as collateral for financing. However, with this amendment to the real estate law, foreigners can now purchase housing under the same conditions as Indonesian nationals.
According to the amended real estate law, real estate ownership has been expanded not only to Indonesian nationals and corporations but also to foreign nationals permitted by law, foreign corporations with branches in Indonesia, foreign governments with representative offices in Indonesia, and international organizations. Polrus, chairman of the Indonesian Real Estate Association (REI), said, "The conditions for foreigners to own real estate have become the same as those for Indonesians," adding, "A potential investment market has fully opened."
Minister Djalil held a video conference regarding real estate policies with two major figures in the real estate sector: James Riadi, CEO of Lippo Group, and Mukta Wijaya, CEO of Sinar Mas Group. At this meeting, he emphasized that the amended real estate law would affect not only more than 170 related industries such as cement, steel, and interior design but also the 30 million workers employed in these industries. CEO Wijaya said, "If foreign investors receive financial support and own real estate, it will also help revitalize the market."
The Indonesian real estate market has not yet recovered from the slump. The local real estate outlook agency IPW reported that real estate prices fell by an average of 8% in the second quarter. This is a result of Indonesians reducing their interest in real estate investment due to the economic downturn. Regional disparities are even greater. Around satellite cities near Jakarta, sales prices dropped by as much as 50.1%.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
