Authored by the expert who managed and guided the team behind the Indonesia Property Pack
Everything you need to know before buying real estate is included in our Indonesia Property Pack
Indonesia's real estate market in 2025 presents a compelling mix of steady growth and regional opportunities.
The market shows resilient performance with moderate price increases nationwide, but specific regions like Bali and Yogyakarta are driving exceptional growth, while Jakarta remains relatively stable. With government reforms supporting foreign investment and infrastructure development accelerating, the Indonesian property market offers distinct opportunities across different price segments and regions.
If you want to go deeper, you can check our pack of documents related to the real estate market in Indonesia, based on reliable facts and data, not opinions or rumors.
Indonesia's real estate market shows 1.6% price growth in Q1 2025, with Bali and Yogyakarta leading regional appreciation while Jakarta remains flat.
The market is projected to reach US$9.16 trillion by 2025, with strong demand for small residential properties and luxury villas in tourist areas.
| Region | Current Price Growth | Investment Appeal |
|---|---|---|
| Bali | 7% annually, luxury villas 10-12% | Highest rental yields (7-15%), best for appreciation |
| Yogyakarta | 8.9% year-over-year | Most affordable entry, strong rental demand |
| Jakarta | 0-2% annually | Stable market, risk of premium oversupply |
| Surabaya/Bandung | Moderate growth | Infrastructure-driven opportunities |
| Secondary Cities | Mixed performance | Lower yields, some oversupply risks |
Fact-checked and reviewed by our local expert
Daniel Rouquette 🇫🇷
CEO & Co-Founder at Villa Finder
What are the key numbers showing how the Indonesian real estate market is performing right now?
The Indonesian real estate market demonstrates solid performance with clear momentum indicators as of September 2025.
The house price index rose by 1.60% in Q1 2025, confirming steady recovery after a mild slowdown in late 2024. The total market value is projected to reach US$9.16 trillion by 2025, with a compound annual growth rate of 5.82% through 2028.
Residential property sales showed strong quarterly momentum with a 33.92% quarter-on-quarter increase in early 2025, while year-over-year growth reached 0.73%. Small residential properties particularly surged with 21.75% year-over-year demand growth in Q1 2025.
The market shows clear regional variation, with some areas experiencing price stagnation while others see robust appreciation. This performance reflects ongoing urbanization, government policy support, and selective regional demand strength.
These figures indicate a market in steady expansion rather than explosive growth, providing opportunities for measured investment strategies.
How do prices and demand differ in the short term compared to the medium and long term?
Short-term and long-term price trajectories show significant regional variation across Indonesia's property markets.
In the short term over the next 12 months, Jakarta prices remain relatively flat with 0-2% annual growth expected. Bali continues its strong performance with 7% annual price increases, while Yogyakarta leads with 8.9% year-over-year growth. Small residential properties nationwide maintain the strongest demand momentum.
Medium to long-term projections over 5-10 years reveal more substantial differences between regions. Jakarta is expected to show slow but steady appreciation of 2-4% annually, translating to 20-40% total growth over 10 years. Bali demonstrates the most consistent long-term potential with 5-8% yearly appreciation, suggesting 50-80% total growth by 2035.
Yogyakarta presents the strongest near-term opportunity with 6-10% annual growth expected, potentially delivering 20% appreciation over 5 years. This reflects its emerging status and growing infrastructure development.
Long-term holders should focus on regions with demographic expansion and infrastructure investment, while short-term investors can capitalize on current momentum in Bali and Yogyakarta.
Which areas of Indonesia are currently growing fastest in terms of property values?
Bali and Yogyakarta dominate Indonesia's property appreciation rankings, with distinct growth drivers in each market.
Bali leads with 7% annual price growth overall, but luxury villa prices surge 10-12% per year. The region remains the most sought-after destination for foreign buyers, driving consistent demand across all property segments. Specific areas like Berawa and Ubud show particularly strong development momentum.
Yogyakarta currently posts the highest recent appreciation at 8.9% year-over-year, emerging as a major hotspot with strong rental demand driven by its education sector and cultural significance. The city offers the best combination of affordability and growth potential.
Infrastructure-linked regions including Surabaya, Bandung, and Batam also demonstrate growing real estate activity. These cities benefit from government infrastructure investment and their strategic locations for logistics and manufacturing.
Tourism-dependent areas generally outperform, while regions with strong educational institutions or industrial development show sustained growth. The common factor among top-performing areas is either foreign investment appeal or government-backed development initiatives.
What regions are showing signs of slowing down or oversupply?
Jakarta and certain property segments nationwide show concerning signs of market saturation and reduced momentum.
Jakarta experiences price stagnation with minimal appreciation, and the premium apartment segment faces particular oversupply risks. The capital's mature market status means fewer growth catalysts compared to emerging regions, while new supply continues to enter the market.
The medium house segment nationwide saw sales drop dramatically by 35.76% year-over-year, indicating oversupply in this specific property category. This suggests developers may have overbuilt in the mid-market segment relative to actual demand.
Several secondary cities outside major metropolitan areas show oversupply conditions with elevated vacancy rates and subdued rental yields. These markets lack the tourism appeal of Bali or the educational demand of Yogyakarta.
Commercial real estate in major metro areas, particularly office and retail segments, faces slow recovery with oversupply risks. The shift to remote work and changing retail patterns contribute to these challenges.
Investors should avoid premium Jakarta apartments and medium-priced houses in secondary markets, focusing instead on proven high-demand regions and property types.
How does the market outlook vary between residential, commercial, and industrial property types?
| Property Type | Current Performance | Investment Outlook |
|---|---|---|
| Residential | Driving overall market growth, small properties +21.75% demand | Strong outlook, especially affordable and luxury segments |
| Commercial Office | Slow recovery, oversupply risks in metro areas | Cautious approach recommended, selective opportunities |
| Commercial Retail | Challenging conditions, changing consumer patterns | Avoid unless exceptional location/concept |
| Industrial | Strong FDI-driven demand, e-commerce growth | Excellent for aggressive investors, logistics focus |
| Mixed-Use | Steady performance, integrated developments | Good diversification option, moderate risk |
What is happening with rental yields and vacancy rates across different cities?
Rental yields and vacancy rates vary dramatically across Indonesian cities, with tourist destinations significantly outperforming urban centers.
Bali delivers the highest rental yields ranging from 7-15% for standard properties, with luxury villas achieving up to 20% returns. Vacancy rates remain low due to consistent tourism demand and foreign buyer interest in rental properties.
Jakarta offers moderate yields of 5-6% for standard properties, but the premium segment delivers lower returns at 4-5%. Vacancy rates remain stable but risk rising in oversupplied luxury apartment complexes. The capital's mature rental market provides steady but unspectacular returns.
Yogyakarta provides yields of 4-8% with low vacancy rates driven by steady demand from the education sector and growing business community. The city's affordability attracts both renters and investors, maintaining balanced supply-demand dynamics.
Most cities outside these prime locations experience subdued yields and slightly elevated vacancy rates. Secondary markets lack the specific demand drivers that support strong rental performance in top-tier cities.
It's something we develop in our Indonesia property pack.
How affordable is property at different budget levels today, and how is this expected to change?
Property affordability varies significantly across Indonesian regions, with clear budget tiers and accessibility levels.
Jakarta properties cost 25-35 million IDR per square meter with modest overall expenses, while total costs including taxes and fees add 8-12% to the base price. This makes Jakarta accessible for mid-range budgets but expensive for entry-level buyers.
Bali represents the premium segment with mainstream properties at 55-66 million IDR per square meter, and luxury villas reaching 70-90 million IDR per square meter. Entry-level apartments start around $60,000, but most desirable listings begin at $100,000 or higher.
Yogyakarta offers the best entry-level affordability at 10-20 million IDR per square meter, making it ideal for first-time buyers and conservative investors. This represents roughly half the cost of Jakarta and one-third of Bali prices.
Affordability pressure is expected to increase moderately as strong demand continues driving price appreciation. However, government affordable housing initiatives may help maintain options for entry-level buyers.
Budget-conscious buyers should focus on Yogyakarta or emerging areas in established cities, while premium buyers can access the best opportunities in Bali and select Jakarta districts.
Don't lose money on your property in Indonesia
100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
What are the government policies, interest rate trends, or economic factors that could impact the market in the next few years?
Government policies and economic fundamentals strongly support Indonesia's real estate market growth through 2028.
The government has relaxed foreign ownership regulations and introduced tax incentives to attract international investment. The "One Million Houses" affordable housing program addresses supply needs for lower-income segments, while the new permanent Golden Visa program specifically targets property investors.
Interest rates remain competitive for mortgage financing, though they're subject to central bank policy adjustments amid global economic uncertainty. Current rates support property purchases but could face pressure from international monetary policy changes.
Economic factors provide solid fundamentals with steady GDP growth projected at 4.7-5.5% annually. Population expansion and ongoing urbanization create consistent demand for housing across price segments. Infrastructure development programs continue boosting property values in connected regions.
Foreign direct investment (FDI) increases support industrial and commercial property demand, particularly in logistics and manufacturing sectors. The government's focus on becoming a regional manufacturing hub drives sustained economic growth.
These policies create a supportive environment for real estate investment, though investors should monitor global interest rate trends and local policy implementation for potential impacts.
If someone wants to buy for their own living, which locations and property types look the most attractive now?
Owner-occupiers should focus on developing areas with strong infrastructure prospects and lifestyle appeal.
- Bali developing districts: Areas like Berawa and Ubud offer lifestyle benefits with appreciation potential, ideal for foreigners seeking permanent residence
- Yogyakarta residential areas: Affordable family housing with cultural richness and educational facilities, perfect for Indonesian families
- Jakarta infrastructure-linked neighborhoods: Areas near new transportation hubs or commercial developments provide convenience and future value
- Eco-friendly housing projects: New build developments with sustainability features appeal to modern buyers and future resale value
- Small residential properties: Currently showing strongest demand growth, offering both affordability and market momentum
The best choice depends on lifestyle preferences, with Bali offering tropical living, Yogyakarta providing cultural immersion and affordability, and Jakarta delivering urban convenience. Infrastructure connectivity should be a primary consideration regardless of location.
It's something we develop in our Indonesia property pack.
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.
If someone wants to buy for rental income, which areas and budgets offer the strongest returns today and in the medium term?
Rental income investors should prioritize Bali and Yogyakarta for the strongest returns, with different budget requirements for each market.
Bali offers the highest rental yields at 7-15% for standard properties, with luxury villas reaching 20% returns. Tourist-centric properties perform best, requiring budgets starting from $100,000 for meaningful investments. The consistent foreign visitor demand provides stable rental income year-round.
Yogyakarta delivers solid yields of 4-8% with much lower entry costs at 10-20 million IDR per square meter. Education-linked properties near universities show particularly strong rental demand from students and faculty. This market requires the smallest initial investment while providing reliable returns.
Select Jakarta districts offer moderate yields of 5-6%, but require careful location selection to avoid oversupplied areas. Focus on neighborhoods with strong transportation links and growing commercial activity.
Budget considerations show Yogyakarta as the most accessible entry point, mid-tier opportunities in Jakarta, and premium investments in Bali delivering the highest absolute returns. Medium-term projections favor continued strong performance in tourist and education-driven markets.
Rental investors should match their budget to the appropriate market tier while focusing on properties with specific demand drivers like tourism, education, or business activity.
If someone wants to buy with the goal of reselling, where are the best opportunities for appreciation in the next five to ten years?
Capital appreciation investors should target regions with the strongest development momentum and supply constraints.
- Bali's developing districts: Berawa and Ubud areas offer 50-80% appreciation potential by 2035, driven by luxury development and foreign demand
- Yogyakarta emerging areas: 20% appreciation expected over 5 years with 6-10% annual growth, benefiting from educational and cultural development
- Infrastructure-connected zones: Surabaya and Bandung areas near new transportation or commercial projects show strong long-term potential
- Tourist region expansions: Areas adjacent to established tourist zones but currently underdeveloped offer significant upside potential
- Government development corridors: Regions benefiting from official infrastructure investment programs provide reliable appreciation catalysts
Long-term appreciation strategies should focus on areas with limited future supply, strong government support, and growing demographic trends. Bali offers the highest appreciation potential but requires premium entry prices, while Yogyakarta provides more accessible opportunities with solid growth prospects.
Timing considerations favor immediate entry in high-growth markets before prices fully reflect development potential. Diversification across multiple promising regions can reduce concentration risk while capturing regional growth variations.
It's something we develop in our Indonesia property pack.
Overall, how should an investor or homebuyer position themselves now depending on their budget, property type preference, and intended use?
Strategic positioning in Indonesia's property market requires matching budget, goals, and risk tolerance to appropriate regions and property types.
Entry-level buyers with limited budgets should target Yogyakarta for both ownership and rental income opportunities. The 10-20 million IDR per square meter pricing provides accessibility while offering 4-8% rental yields and solid appreciation potential.
Mid to high-budget investors should prioritize Bali for maximum appreciation and rental income. The 7-15% yields and luxury segment growth of 10-12% annually justify higher entry costs. Focus on tourist-centric properties for consistent rental demand.
Portfolio diversification strategies should include infrastructure-backed cities like Surabaya and Bandung alongside primary targets. Mixed-use developments provide balance between stability and growth potential.
Property type preferences should favor residential over commercial, given stronger market momentum and clearer demand drivers. Industrial and logistics properties suit aggressive investors comfortable with higher risk-reward profiles.
Risk management suggests avoiding Jakarta premium apartments and medium house segments showing oversupply. Instead, focus on proven high-demand areas and property types with specific demand catalysts like tourism, education, or infrastructure development.
The Indonesian market rewards strategic selection over broad exposure, making regional and property type specialization more effective than diversified approaches.
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.
Indonesia's real estate market offers compelling opportunities for both investors and homebuyers, with clear regional winners and strategic positioning requirements.
Success depends on matching budget and goals to the right locations, with Bali leading for premium returns, Yogyakarta for entry-level opportunities, and infrastructure-connected regions for long-term appreciation.