What is the average rental yield in Makassar?

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BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Makassar. If you'd like to learn more about us, you can check our presentation page.

What are the main property types available in Makassar and how do their rental yields differ?

Makassar offers five primary property types for rental investment, each with distinct yield characteristics.

Apartments and condominiums dominate the central urban areas, particularly attracting expats and professionals. These properties generate gross rental yields of 2.9% in the city center and 5.7% outside the center. The higher suburban yields reflect lower purchase prices while maintaining decent rental demand.

Landed houses appeal primarily to families and long-term residents in suburban districts. These properties typically yield slightly higher returns than city center apartments, especially in growth districts where affordable housing projects maintain stable rental demand. The yields benefit from consistent occupancy among family renters seeking more space.

Villas and townhouses target premium buyers and lifestyle-oriented renters. While purchase prices are higher, these properties can command premium rents in desirable neighborhoods, though the market segment is smaller and more selective.

Commercial spaces, including office buildings and retail units, typically yield 6-8% returns but come with greater vacancy risk and market volatility. The commercial segment is growing alongside Makassar's business expansion, creating opportunities for investors willing to accept higher risk.

Which areas or neighborhoods in Makassar show the strongest rental performance right now?

Central Makassar leads rental performance as of September 2025, driven by growing professional and business activity.

Manggala stands out as the top investment destination, with modern housing projects and surging property values creating strong rental yields. The area attracts young professionals and families seeking contemporary amenities and good transportation links.

Rappocini demonstrates excellent rental performance due to high student demand from nearby universities. The consistent student population ensures reliable occupancy rates and steady rental income throughout the academic year. Investors benefit from multiple rental cycles as students graduate and new cohorts arrive.

Tamalate offers compelling opportunities for yield-focused investors, combining affordable purchase prices with appreciation potential from ongoing infrastructure projects. The area attracts budget-conscious renters while benefiting from planned improvements to transportation and public facilities.

It's something we develop in our Indonesia property pack.

How does the rental yield vary depending on the size or surface of the property?

Property size significantly impacts rental yields in Makassar, with smaller units generally outperforming larger ones on a percentage basis.

What is the average total purchase price including fees and taxes for different property types?

Property purchase costs in Makassar extend well beyond the listing price, with significant fees and taxes affecting total investment.

City center apartments average 2,322,556 Rp per square meter, while suburban apartments cost 929,022 Rp per square meter. These base prices must be increased by 18-20% for total acquisition costs.

Transfer tax adds 5% of the property value, while VAT ranges from 11-12% for new builds. Legal fees typically consume 1-2.5% of the purchase price, and real estate agent commissions add another 2-3% to the total cost.

For a 1-bedroom apartment outside the city center priced at 550,000,000 Rp, total costs reach approximately 650,000,000 Rp after adding transfer tax (27,500,000 Rp), VAT (60,500,000 Rp), legal fees (11,000,000 Rp), and agent fees (16,500,000 Rp).

Commercial properties face similar percentage costs but may incur higher agent and legal fees due to complex transaction structures.

How do ongoing costs such as maintenance, service charges, and property taxes affect net rental yields?

Ongoing property costs significantly reduce gross rental yields, requiring careful calculation for accurate investment analysis.

Maintenance and service charges typically consume 1-2% of property value annually for apartments, depending on building facilities and age. Newer developments with pools, gyms, and 24-hour security command higher service charges but also attract premium rents.

Property taxes (PBB) reach up to 0.5% of assessed value annually, though actual rates often fall below this maximum. The tax calculation uses government-assessed values, which frequently lag behind market prices.

Utility costs average 98 USD monthly for standard apartments, while internet service adds 32 USD monthly. These costs can be passed to tenants in some rental arrangements, improving net yields.

Property management fees range from 8-12% of rental income for professional management services, particularly common for expat-oriented properties and short-term rentals.

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If I finance a property with a mortgage, how does that impact the effective yield compared to buying cash?

Mortgage financing remains largely unavailable for foreign investors in Makassar, with most purchases requiring cash transactions.

Local mortgages for foreigners require specific company structures (PT PMA), making them inaccessible for individual investors. Indonesian residents can access mortgages at approximately 6% annual interest rates, but foreign buyers typically cannot qualify.

For cash purchases, a 5.7% gross yield on a suburban apartment translates to approximately 4.2% net yield after ongoing costs. With hypothetical mortgage financing at 6% interest, the effective yield turns negative once financing costs exceed rental income.

The cash requirement actually benefits investors by eliminating interest payments and mortgage qualification hurdles. However, it increases the capital requirement and reduces leverage opportunities available in other markets.

Investors must prepare for 100% cash transactions, making property selection and yield optimization crucial for generating adequate returns on invested capital.

What are the typical rental prices for different types of properties, such as apartments, houses, and commercial spaces?

Rental prices in Makassar vary substantially by property type and location, with clear premiums for central locations.

1-bedroom apartments command 3,250,000 Rp monthly in the city center versus 2,600,000 Rp outside the center. 3-bedroom apartments rent for 6,000,000 Rp centrally and 4,750,000 Rp in suburban areas.

Commercial spaces show wide variation, ranging from 500 USD to 2,000 USD monthly depending on size, location, and business type. Prime retail locations in shopping districts command premium rates, while office spaces vary by building quality and amenities.

Villas and houses in premium districts rent for 8,000,000-15,000,000 Rp monthly, while suburban family homes range from 5,000,000-8,000,000 Rp monthly. The wide range reflects varying property sizes, conditions, and neighborhood desirability.

Short-term rental rates typically achieve 150-200% of long-term monthly rates when calculated on a per-night basis, though occupancy rates affect overall monthly income.

How do short-term rentals compare with long-term rentals in terms of income potential and occupancy?

Short-term rentals generate higher per-night rates but require active management and face variable occupancy challenges.

Airbnb and holiday rentals typically earn 150-200% more per night than equivalent long-term monthly rates. A 1-bedroom apartment renting for 2,600,000 Rp monthly long-term might achieve 150,000-200,000 Rp per night on short-term platforms.

Occupancy rates vary significantly by location and season, with central and tourist-friendly areas maintaining 60-75% occupancy, while suburban areas struggle to achieve 40-50% occupancy for short-term rentals.

Management costs substantially impact short-term rental profitability, including cleaning fees, platform commissions (typically 3-5%), guest communication, and property maintenance. Professional management services charge 15-25% of gross income.

Long-term rentals offer stability with 85-95% occupancy rates in good locations, lower management overhead, and predictable monthly income. They appeal to students, professionals, and families seeking housing stability.

It's something we develop in our Indonesia property pack.

What are the typical renter profiles in Makassar, and how do they affect rental demand and stability?

Makassar's rental market serves four distinct tenant categories, each driving demand in specific property segments and locations.

University students concentrate near educational institutions, particularly in Rappocini and surrounding areas. They favor affordable housing and shared accommodations, creating consistent demand for smaller apartments and boarding house-style properties. Student renters typically sign 10-12 month leases aligned with academic years.

Expat professionals prefer central, serviced, or modern apartments with international-standard amenities. This segment drives demand for higher-quality properties in central Makassar and pushes up rental yields in premium locations. They typically seek 1-2 year lease terms and pay market premiums for convenience.

Local families gravitate toward landed houses in suburban districts, seeking space, parking, and family-friendly neighborhoods. Family renters provide the most stable tenancy, often staying 2-5 years when satisfied with property and location.

Business travelers and tourists fuel short-term rental demand, particularly in central areas and near business districts. This segment creates higher-yield opportunities but requires active property management and marketing.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Indonesia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

What are the current vacancy rates across property types and areas, and how do they influence yields?

Vacancy rates in Makassar show clear patterns by location and property type, directly impacting investment returns.

Central apartment occupancy rates reach 70-80% for prime units, with newer, well-managed properties achieving higher occupancy than older buildings. The strong occupancy reflects growing professional populations and limited high-quality housing supply in central areas.

Suburban properties face higher vacancy rates, with occupancy dropping to 60-70% as residents increasingly prefer city living for work convenience. This trend pressures suburban rental yields and requires competitive pricing to maintain occupancy.

University-adjacent areas maintain stable occupancy due to consistent student demand, though seasonal variations occur during academic breaks. Properties near major universities typically achieve 80-90% annual occupancy.

Commercial properties show more volatility, with vacancy rates ranging from 10-30% depending on location and economic conditions. Prime commercial locations maintain low vacancy, while secondary areas struggle with higher empty periods.

How have rental yields and rents changed compared to five years ago and compared to one year ago, and what are the forecasts for one year, five years, and ten years?

Makassar's rental market has experienced significant evolution over the past five years, with yields declining as property prices rose faster than rental rates.

Between 2020-2024, central apartment yields fell from 6%+ to current levels of 2.9-5.7% as property prices increased rapidly while rents grew more moderately. This compression reflects maturing market conditions and increased investor interest in Makassar properties.

Over the past year, yields have stabilized with slight declines as new supply enters the market while demand remains robust, particularly in central locations. Property prices continued rising 8-12% annually while rents increased only 4-6%.

For 2026, forecasts predict continued mild upward rent growth of 5-7% in city core areas, with stable to slightly softening yields as supply increases. Suburban areas may see yield pressure as urbanization trends continue favoring central living.

The 2026-2030 outlook shows steady rental growth averaging 4-6% annually in prime areas, with yields stabilizing around current levels. Infrastructure development and economic growth should support rental demand, particularly for quality properties in well-connected locations.

It's something we develop in our Indonesia property pack.

How do rental yields in Makassar compare with those in other major Indonesian cities with similar profiles?

Makassar's rental yields position competitively within Indonesia's secondary city market, offering attractive returns compared to major metropolitan areas.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. Indonesia Real Estate - Makassar Property
2. Nusantara Developments FAQ
3. BambooRoutes - Makassar Real Estate Forecasts
4. Numbeo - Property Investment Makassar
5. BambooRoutes - Makassar Real Estate Trends
6. BambooRoutes - Makassar Areas Guide
7. Pacific Prime - Cost of Living Indonesia
8. Wise - Buy Property in Indonesia
9. Global Property Guide - Indonesia Buying Guide
10. Global Property Guide - Indonesia Price History