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 property market offers significant opportunities for both lifestyle buyers and investors, with Bali villas delivering 8-15% rental yields and Jakarta apartments providing solid capital appreciation potential. Foreign buyers can legally invest through leasehold arrangements or company structures, with minimum budgets starting around $130,000 for decent properties in prime locations.
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 property market presents compelling opportunities with Bali villas generating the highest rental yields at 8-15% and Jakarta apartments offering steady capital growth of 7-12% annually.
Foreign buyers face minimum investment thresholds of $130,000-$325,000 depending on location and legal structure, with transaction costs totaling 6.5-9% of purchase price.
| Location | Property Type | Average Price/sqm | Rental Yield | Min. Foreign Investment |
|---|---|---|---|---|
| Bali (Canggu/Seminyak) | Villa | $1,000-$2,000 | 8-15% | $130,000 |
| Jakarta CBD | Apartment | $2,190-$3,240 | 4-13% | $325,000 |
| Surabaya | Apartment | $1,200-$1,900 | 7-9% | $130,000 |
| Lombok | Villa/Land | Below Bali prices | 8-12% | $130,000 |
Fact-checked and reviewed by our local expert
Daniel Rouquette 🇫🇷
CEO & Co-Founder at Villa Finder
What's the current average price per square meter for different property types in Bali, Jakarta, and other major areas?
Property prices in Indonesia vary significantly by location and type, with Jakarta commanding the highest prices at $2,190 per square meter on average.
In Bali, villas in prime areas like Canggu, Berawa, and Seminyak cost $1,000-$2,000 per square meter for land, while apartments average IDR 5-6 million per square meter (approximately $320-$390 per square meter). Small villas start around $100,000, with luxury properties exceeding $1 million.
Jakarta's property market shows clear price segmentation, with non-prime areas averaging $1,670 per square meter and CBD locations reaching $3,240 per square meter. Studio apartments start from $29,000, one-bedroom units from $67,000, and two-bedroom properties from $150,000. For foreign buyers seeking premium villa or land transactions, budgets typically start at $655,000.
Surabaya offers more affordable options at approximately $1,200-$1,900 per square meter for apartments and houses in central areas. Lombok maintains lower prices than Bali but is experiencing rapid growth, particularly in south Lombok coastal areas.
As of September 2025, land prices in southern Bali are rising fastest at 6-8% annually, driven by strong tourism demand and limited available land in prime beachfront locations.
How much rental yield can you realistically expect short-term versus medium-term across these locations?
Bali leads Indonesia's rental yield market with impressive returns, especially for short-term rentals in tourist hotspots.
Short-term rentals (Airbnb, daily/weekly bookings) in Bali's prime areas generate 8-15% gross yields, with Canggu, Seminyak, and Uluwatu performing best. Medium to long-term rentals in Bali typically deliver 6-10% gross yields, still competitive compared to other Indonesian markets.
Jakarta's rental market offers more modest but stable returns, averaging 4-7% for apartments across the city. However, well-positioned small units in central Jakarta can achieve up to 13% yields, while properties in outer areas typically underperform at the lower end of the range.
Surabaya provides consistent yields of 7-9% for quality apartments, making it attractive for investors seeking steady income without tourism dependency. Lombok shows strong potential with 8-12% yields possible for properties in developing tourist areas, though this requires careful location selection.
It's something we develop in our Indonesia property pack.
What are the transaction costs, taxes, and ongoing ownership fees you should budget for?
Transaction costs in Indonesia are substantial and should be factored into your investment calculations from the start.
| Cost Category | Rate | Who Pays |
|---|---|---|
| Property Transfer Tax | 5% | Buyer |
| Notary Fees | 1-2.5% | Buyer |
| Legal Fees | 0.5-1.5% | Buyer |
| Registration | ~0.2% | Buyer |
| Capital Gains Tax | 2.5% | Seller |
| Annual Property Tax (PBB) | 0.1-0.5% | Owner |
| Rental Income Tax | 10% | Owner |
Buyers should budget 6.5-9% over the purchase price for all transaction costs. Sellers face a 2.5% capital gains tax when disposing of properties. Ongoing ownership costs include annual property tax (PBB) at 0.1-0.5% of property value and 10% tax on rental income.
HOA and management fees vary widely, typically ranging from IDR 100,000 to 1,000,000 per month depending on property type and amenities. Luxury developments and full-service villa complexes command higher monthly fees.
How easy is it for foreigners to legally own, lease, or invest in property in Indonesia right now?
Foreign property ownership in Indonesia requires navigating specific legal structures, with several viable options available as of September 2025.
Freehold ownership ("Hak Milik") remains exclusively for Indonesian citizens, but foreigners can access property through leasehold arrangements ("Hak Sewa") lasting 25-30 years, often extendable. This represents the simplest option for lifestyle buyers and expats.
For apartment ownership, foreigners can use strata-title arrangements ("Hak Pakai") or establish a foreign-owned company ("PT PMA") for "Hak Guna Bangunan" rights. PT PMA structures require compliance with minimum investment thresholds: $130,000-$325,000 in Bali and Jakarta, with potential land size restrictions.
Short-term rental operations require permits and are only allowed in designated "tourism" zones. Recent enforcement of abandoned-land laws and evolving licensing requirements make professional legal advice essential for any foreign property transaction.
Due diligence processes have become more stringent, but the legal framework remains foreign-investor friendly for those who properly structure their investments and maintain compliance with regulations.
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What's the minimum budget you need to buy a decent property for living, renting out, or reselling?
Minimum investment budgets in Indonesia depend on your intended use and desired legal structure.
For lifestyle and living purposes, entry-level leasehold properties start at $100,000-$150,000 for decent 1-2 bedroom units in Bali or comparable properties in other locations. These properties provide adequate living standards for expats and digital nomads without requiring complex corporate structures.
Investment and rental properties require higher budgets due to minimum foreign investment requirements. Freehold or strata-title acquisitions range from $130,000-$650,000 depending on region and property type, with luxury, central, or beachfront properties commanding premium prices above this range.
For resale and flipping strategies, target at least $200,000 to access markets with better liquidity and exit opportunities. Properties below this threshold often face limited buyer pools and longer sale periods, particularly for foreign-owned assets.
Jakarta CBD properties for foreign buyers typically start at $325,000 for meaningful investment opportunities, while Bali offers more flexibility with $130,000 minimum thresholds in many areas. Lombok and Surabaya provide the most affordable entry points for foreign investors seeking growth potential.
How does property value growth compare in the short term (1–3 years), medium term (3–7 years), and long term (7+ years)?
Indonesian property markets show varying growth patterns across different time horizons, with Jakarta and Bali leading appreciation rates.
Short-term growth (1-3 years) expectations show Jakarta and Bali markets delivering 7-12% annual growth, supported by strong tourism recovery and urban development. Other cities maintain slower but more consistent growth at 3-5% annually, providing stability over rapid appreciation.
Medium-term projections (3-7 years) anticipate continued strong performance with 7-10% compound annual growth rates (CAGR) for Bali and Jakarta markets, driven by major infrastructure projects and sustained tourism growth. Secondary cities like Surabaya and emerging areas like Lombok expect 3-6% CAGR during this period.
Long-term outlook (7+ years) positions Jakarta and Bali for continued outperformance, contingent on currency stability and political continuity. Lombok shows the strongest price appreciation potential as new resort developments come online and infrastructure improves connectivity to Bali.
Infrastructure investments, including the new capital city project (Nusantara) and improved transportation links, are expected to create new growth centers and redistribute some appreciation away from traditional Jakarta-Bali dominance over the long term.
Which areas are currently most attractive for lifestyle buyers versus pure investors?
Lifestyle buyers and pure investors target different areas in Indonesia based on living quality versus return potential.
Lifestyle buyers gravitate toward Bali's Canggu, Seminyak, Berawa, and Uluwatu for beachfront living and vibrant expat communities. Jakarta lifestyle buyers prefer Kemang, Menteng, and South Jakarta for urban amenities and international schools. Hill and mountain areas near Ubud attract wellness-focused buyers and remote workers seeking tranquil environments.
Pure investors focus on rental yield and appreciation potential, targeting short-term rental zones in Canggu and Seminyak, central and south-central Jakarta apartments for steady income, and emerging South Lombok developments for capital appreciation. Surabaya appeals to investors seeking consistent rental income without tourism dependency.
Hybrid lifestyle-investment areas include Berawa and Canggu in Bali, offering both good living environments and strong rental potential. South Jakarta provides urban lifestyle benefits while maintaining solid investment fundamentals for long-term appreciation.
It's something we develop in our Indonesia property pack.
Emerging opportunities exist in areas like Tabanan and Kedungu in Bali, offering lower entry costs while benefiting from spillover demand from more established areas.
How does demand for villas, apartments, and land differ in Bali compared to Jakarta, Surabaya, or Lombok?
Property type demand varies significantly across Indonesian markets, reflecting local buyer preferences and usage patterns.
Bali demonstrates strong villa dominance with 60%+ of sales involving villa properties, driven by tourist rentals and digital nomad preferences. Land prices in Bali are rising fastest due to development pressure and limited supply in coastal areas. Leasehold arrangements are much more common for foreign buyers than other property types.
Jakarta's market centers on apartments and condos, particularly in CBD, South, and West Jakarta locations. Landed housing remains primarily for Indonesian citizens and high-net-worth expats due to ownership restrictions and price levels. New apartment developments continue launching to meet urban density requirements.
Surabaya focuses on apartments for local residents and expat professionals, with steady demand for quality residential units. The market shows less speculative activity and more end-user driven purchases compared to tourist-dependent areas.
Lombok is experiencing increasing demand for both villas and land purchases from lifestyle and investor buyers. This emerging market attracts buyers seeking lower entry costs and higher appreciation potential as tourism infrastructure develops and connectivity to Bali improves.
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 risks of currency fluctuations, regulations, or political changes on your investment?
Indonesian property investments face several macro-level risks that require careful consideration and risk management strategies.
Currency risk represents a significant concern as the Indonesian Rupiah has weakened to 1998 lows recently, creating potential dollar-denominated asset value declines for foreign investors. This affects both purchase power and exit value calculations, particularly for investors planning to repatriate funds.
Regulatory risk centers on evolving foreign ownership rules that can change with policy shifts. Robust due diligence and proper legal structuring through PT PMA versus nominee arrangements become vital for long-term security. Recent enforcement of abandoned-land laws demonstrates increased government scrutiny of foreign property holdings.
Political stability has remained generally positive, but upcoming elections and fiscal policy changes could trigger new property regulations, taxes, or ownership restrictions. Changes in foreign investment policies could affect minimum investment thresholds or permissible ownership structures.
Infrastructure and development risks include potential changes to zoning laws, tourism regulations, and permit requirements that could impact property values or rental operations. Short-term rental restrictions have tightened in some areas, affecting income potential for investment properties.
How liquid is the market if you want to resell within 3 years, 5 years, or 10 years?
Indonesian property market liquidity varies significantly by time horizon and location, with longer holding periods generally providing better exit opportunities.
Three-year liquidity remains limited, with resales mainly successful in established hotspots with strong tourist and investor interest. Properties in secondary locations or those requiring significant legal restructuring face challenging exit scenarios within this timeframe.
Five to seven-year holding periods offer substantially more options as the market matures and more international buyers enter Indonesian markets. Well-located assets in primary urban and holiday zones show improved liquidity, though transaction times may still exceed those in more developed markets.
Ten-year plus holdings provide optimal liquidity for quality assets in prime locations. Jakarta CBD apartments, established Bali villa areas, and major city residential properties typically find ready buyers within reasonable timeframes. Secondary and remote land parcels may still require longer marketing periods.
Market liquidity improvements are expected as regulatory frameworks stabilize, foreign buyer confidence increases, and local financing options expand for international transactions. Properties with clear legal structure and prime locations consistently outperform in all liquidity scenarios.
What are the top-performing property types right now if your goal is rental income versus capital appreciation?
Different property types in Indonesia serve distinct investment strategies, with clear winners for rental income versus capital appreciation goals.
Rental income leaders include Bali villas in Canggu, Berawa, and Seminyak for short-term lets, generating 8-15% gross yields through tourist demand. Central Jakarta small apartments and popular condo developments provide steady rental income with lower management requirements and consistent tenant demand.
Capital appreciation champions focus on prime land positions and development potential. Coastal and prime plots in Bali and Lombok show strongest appreciation potential as supply constraints meet growing demand. Central apartment towers in Jakarta benefit from urban density trends and infrastructure improvements.
Land near upcoming tourist developments represents the highest appreciation potential, particularly in South Lombok where resort development pipelines are creating value increases before construction completion. Bali land in emerging areas like Tabanan offers similar potential with lower entry costs.
It's something we develop in our Indonesia property pack.
Hybrid opportunities exist in established Bali villa areas where properties generate strong rental income while appreciating due to land scarcity. Jakarta premium developments can provide both steady rental returns and long-term appreciation potential.
If you had to choose today, where should you buy, with what budget, and in which property type to maximize your chances of success?
Strategic property selection in Indonesia requires matching budget, location, and property type to maximize success probability across different investment ranges.
For budgets of $130,000-$300,000, target 2-bedroom leasehold villas in Bali's emerging areas like Tabanan or Kedungu, which offer lower entry costs with spillover potential from established areas. Alternative options include 1-2 bedroom apartments in West or South Jakarta or quality apartments in Surabaya for steady rental income.
Mid-range budgets of $300,000-$650,000 should focus on freehold acquisitions (via PT PMA structure) for villas or land in South or Central Bali locations like Seminyak and Canggu. New coastal Lombok developments present higher appreciation potential for investors willing to accept emerging market risks.
Premium budgets of $650,000 and above can access luxury villa or penthouse apartments in Jakarta CBD, premium beachfront villas in established Bali locations, or large development land parcels in Lombok for maximum appreciation potential.
The optimal strategy combines Bali villas or central Jakarta apartments with proper legal structure for the best combination of rental returns and appreciation potential. Professional legal support is essential regardless of budget level, and investors should plan minimum 5+ year holding periods for optimal liquidity and growth while closely monitoring currency and regulatory risks.
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 property market offers compelling opportunities for both lifestyle and investment buyers, with Bali leading in rental yields and Jakarta providing urban appreciation potential.
Success requires proper legal structuring, adequate budgets, and realistic time horizons, with professional guidance essential for navigating foreign ownership regulations and market complexities.
Sources
- Bali Villa Realty - Cost of Property in Bali
- Global Property Guide - Indonesia Price History
- BambooRoutes - Average House Price Jakarta
- iLot Property Bali - High Property Returns
- IndoneD - Rental Yields in Indonesia
- DSG Pay - Buying Property for Foreigners
- Wise - Buy Property in Indonesia
- Global Property Guide - Indonesia Buying Guide
- BambooRoutes - Bali Property
- Research and Markets - Indonesia Real Estate Market