Buying a property in Jakarta: a complete guide

All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article.

Yes, the analysis of Jakarta's property market is included in our pack

Interested in buying a nice property in Jakarta? You're not alone!

Many people are enchanted by Jakarta's vibrant culture and dream of owning a modern apartment or a stylish townhouse in this city.

Would it be a good investment, though? Are property prices increasing in Jakarta? How much does it cost? Should you consider investing in Menteng or Kemang? What about the taxes? Where can you get a rental yield above 7%?

We've figured it out for you.

The BambooRoutes team has done their homework on this market. Actually, we have condensed all our findings in a pack. Get it now.

In this article, we're happy to share useful information with you.

How is the property market in Jakarta?

Is the property market on an upward trend or a downward trend? Let's examine the data.

Property types

In Jakarta, there are various types of properties available for sale, catering to different preferences and needs.

These include apartments, which are popular for their convenience and modern amenities; houses, ranging from traditional homes to modern villas with diverse architectural styles; commercial properties like shops and offices, suitable for business ventures; and land for potential development or investment.

Whether you're seeking a cozy living space, a business opportunity, or a piece of land to build on, Jakarta offers a wide range of property options to choose from.

Buying vs Renting

(If you're keeping it for yourself and not renting it)

Whether you're considering settling in Jakarta or already living there, you might be thinking about the pros and cons of buying versus renting a property in this vibrant Indonesian city.

Without a doubt, it's better to buy if you want to build long-term wealth and gain equity in the property.

One data can help you make a decision - the property price-to-rent ratio. You can use this number to see how long it will take to recover the property's cost through rental earnings.

According to Numbeo, the property price-to-rent ratio in Jakarta is around 21.37, which is around the world average.

To put it simply, it usually takes an average of 21 years of rental payments to buy a property in Jakarta. Better to buy then.

Property prices in Jakarta

On average, according to the last data from Bank Indonesia, purchasing a property in Jakarta would cost you around $2,840 per square meter.

There are big differences, obviously. An apartment in SCBD might have a different price per square meter than a house in Pondok Indah. We actually give you a more detailed breakdown in our pack for buying property in Jakarta and in Indonesia.

To put things in perspective, it means that, instead of buying an apartment in Singapore, you can get 5 properties in Jakarta.

Also, housing prices in Jakarta are 37% cheaper than in Manila.

The most expensive neighbourhoods in Jakarta are probably South Jakarta and Central Jakarta, while the cheapest are likely to be East Jakarta and North Jakarta.

Trends

First and foremost, it's crucial to mention that Indonesia is now a relatively stable country. The last Fragile State Index that has been reported for this place is 66.6.

Don't overlook this while weighing the pros and cons of buying a property in Jakarta.

If we look at the IMF’s forecasts, we can see that Indonesia's economy is expected to soar by 22.5% in the coming 5 years, resulting in an average GDP growth rate of 4.5%.

If you want to invest in real estate in Jakarta it's a good thing because a growing economy means rising incomes for its citizens, enabling them to invest in real estate, both for personal use and as a lucrative asset, driving the demand for properties.

Also, in Indonesia, the average GDP per capita has changed by 8.9% over the last 5 years. It's a satisfactory number.

These are positive signals showing that property prices in Jakarta might increase in 2024 and during the coming years.

Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Indonesia right now.

Buying property in Jakarta

Buying real estate in Jakarta can be difficult due to the lack of reliable and up-to-date information available. That's why we have created the pack to buy property in Jakarta and in Indonesia.

Buying process

Within our pack, we have outlined the complete buying process. This includes the necessary documents, the applicable taxes, as well as information about where to locate properties, and more.

Here, we are providing you with a simpler version to assist you in better comprehending the information.

This is the step-by-step process to purchase a property in Jakarta:

1. Obtain a Taxpayer Identification Number (NPWP) and Open a Bank Account in Indonesia.
2. Determine your budget and property preferences in Jakarta.
3. Engage a reputable property agent licensed by the Indonesian Real Estate Broker Association (AREBI).
4. Conduct property search and viewings, considering land certificates (SHM/HGB) and building permits (IMB).
5. Negotiate the price and terms with the seller, subject to approval from the local community leader (RT/RW).
6. Sign a Letter of Intent (LOI) and pay a deposit, typically 10% of the property price.
7. Appoint a notary to handle the transaction, who will prepare the Sale and Purchase Agreement (Akta Jual Beli).
8. Conduct a due diligence check on the property, verifying ownership and legal status.
9. Sign the Sale and Purchase Agreement (Akta Jual Beli) before the notary and pay the down payment (around 20-30%).
10. Pay the necessary property transfer taxes (BPHTB) and notary fees.
11. Transfer the remaining payment to the seller and get the seller's clearance certificate (SKMHT).
12. Complete the transfer of ownership at the Land Deed Official (PPAT) and register the property at the local Land Office (BPN). Obtain the new land certificate (SHM/HGB) under your name.

Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Indonesia.

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Where to find a property

Find your dream property in Jakarta using these websites.

• Veles Club - They offer a real estate directory and a survey to help find ideal properties for investment and living in Bali, with bonuses for participating.
• Power Property - Leading real estate company in Bali, specializing in villas, developments, apartments, and commercial properties for sale and rent.
• Lazudi - Bali Treasure Properties specializes in long-term villa rentals, property lease, and sales in Bali.
• Dot Property - Dot Property Indonesia is a comprehensive online platform for buying, renting, and selling real estate in Indonesia.
• FazWaz - FazWaz is a leading real estate marketplace in Indonesia that offers a platform for buying, renting, and selling properties.

Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Indonesia.

What you can get

As mentioned before, the average price per sqm in Jakarta is $2,840. A 1-bedroom property with 60 square meters of space would cost approximately $170,000, while a 2-bedroom with 85 square meters would cost around $241,000.

Of course, the price of properties can be influenced by their qualities and the area they're in.

Top neighborhoods in Jakarta will come with higher price tags. A residence in Menteng could cost around $690,000, whereas a house in Kemang might be priced at $500,000.

Of course, some regions offer more affordability. You may locate an apartment in Cempaka Putih for $90,000, or you might find an apartment in Kebayoran Baru priced at $80,000.

Find a more detailed price list in our full pack for buying property in Indonesia.

Risks and pitfalls

Here are the main pitfalls when buying a property in Jakarta, Indonesia:

• Hak Pakai restriction: Foreigners can only lease, not own, land with Hak Pakai, limiting property rights.
• Urban flooding: Some areas are prone to floods, impacting property value and maintenance costs.
• Land tenure issues: Verify the legality of land ownership, as informal settlements can lead to disputes.
• Complex permits: Navigate bureaucratic processes and potential delays in obtaining construction permits.
• Land subsidence: Certain areas in Jakarta experience sinking land, leading to structural instability over time.
• Cultural differences: Understand local customs and norms when dealing with property transactions and negotiations.
• Taxation rules: Be aware of property taxes, which can vary depending on the location and property type.
• Infrastructure challenges: Check for road congestion, public transportation access, and utilities reliability in the area.

We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.

Everything you need to know is included in our Indonesia Property Pack

Living in Jakarta

Living in Jakarta is an exciting experience with a vibrant culture, diverse population, and plenty of property options for those looking to invest.

Cost of living

The cost of living in Jakarta is generally higher than other cities in Indonesia, with prices for goods and services being higher than the national average. However, the cost of living can still be relatively affordable for expats, depending on the lifestyle they choose.

Here are some examples to better understand the cost of living in Jakarta:

• Rent for a one-bedroom apartment in Kemang neighborhood: $800/month.
• Monthly public transportation card (Jakarta MRT card): $25.
• "Nasi Padang" lunch for two at a local warung: $15.
• "Bintang" beer at a bar: $3.
• Groceries at Carrefour or Giant supermarket: $100/week for a family of four.
• Basic utilities for an 85m² apartment with PLN: $90/month.
• Ticket to a concert at Istora Senayan: $20.
• "Es Teler" at a street vendor: $2.50.

Neighbourhoods

Since we aim to make information easy to understand, we've created a summary table outlining the various neighborhoods in Jakarta. For yields, prices and rents, check our property pack.

Life in Jakarta

The economic landscape in Jakarta is largely driven by the services sector, which accounts for approximately 70% of the city's GDP. Jakarta is also home to a vibrant manufacturing sector, with a wide range of industries including automotive, electronics, and textiles.

As per the IMF's data, Jakarta's GDP contributes to almost 24% of Indonesia's GDP. Investing in property in a city with a strong GDP is smart because the city's thriving economy suggests more jobs, higher demand for real estate, and stable property values, making it a favorable investment environment.

What expats usually like the most in Jakarta are the vibrant nightlife and the variety of delicious local cuisines. They also appreciate the city's modern infrastructure and its convenient location in Southeast Asia.

However, the crime rate index of Jakarta, which is around 53, could be better, which is something to take into consideration if you're thinking about living there. Examples of crimes in Jakarta include pickpocketing, robbery, and fraud, which mainly affect the local population and are not common among the expat population.

Also, you have to know that Jakarta is sinking and at risk of flooding due to a combination of groundwater extraction and rising sea levels.

A good point for a property investor - there is a mass rapid transit system in Jakarta, known as the Jakarta MRT.

Access to healthcare in Jakarta is good, with a Healthcare Index of 57. An effective healthcare infrastructure always boost the appeal of a place, which is good for real estate.

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Renting out in Jakarta

If your intention is to buy a property not for personal use, but to rent it out and create income, then this section is for you.

Long-term

Tenant Profiles in Jakarta

According to the data reported by Wikipedia, the home ownership rate in Indonesia is 84%, which is rather high.

But things are a bit different in Jakarta. There are lots of foreigners and young workers there, so there are plenty of people looking to rent homes.

If you decide to buy and rent out to long-term tenants, you should target young professionals, expats, and students in Jakarta due to the high demand for rental properties in the city. Short-term tenants usually include business travelers, vacationers, and digital nomads.

Here is a little summary table we've made for you.

Rental yields

Nowadays, rental yields in Jakarta are usually below 5%. It's not much. A good rental yield is usually around 7% or higher. Maybe, you knew it already.

In Jakarta, properties in areas with high population density and close to public transportation and amenities tend to give the best rental yields due to their high demand and desirability among renters. Properties near business districts, universities, and tourist attractions also tend to offer good rental yields.

For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.

Finally, be aware that rental incomes in Jakarta are taxed at 20%, which is rather good.

Short-term

You could also decide to rent short-term to business travelers, expats, and digital nomads who are looking for a place to stay in Jakarta. Additionally, local students and professionals who are in need of temporary accommodation are potential tenants for short-term rentals in Jakarta.

If you decide to go with that option, look for properties in South Jakarta, particularly in the areas of Kemang, Senopati, and Kuningan. These are popular areas for tourists and expats, and have a high demand for short-term rentals.

Currently, there are approximately 6,000 active Airbnb listings in Jakarta, reflecting a highly dynamic and bustling short-term rental market. The average daily rate is at $41.

You have the opportunity to generate some additional income stream then. Based on feedback from online testimonials and data analytics platforms such as AirDNA, Guesty, and Inside Airbnb, people who offer short-term rentals in Jakarta can make around $300 per month. Also, the average occupancy rate is estimated at 39%.

Is it worth buying real estate in Jakarta then?

If you're in Jakarta for the long haul and looking to invest, buying property can be a savvy move. The property price-to-rent ratio is relatively favorable, meaning that over time, you'll likely benefit from building equity rather than paying rent.

Jakarta's property prices are reasonable compared to many global cities, offering excellent value for your investment. Moreover, the promising economic outlook suggests that property prices may appreciate in the coming years, potentially increasing your wealth.

However, if you're a short-term visitor or concerned about issues like flooding and complex permits, renting may be more practical. Also, be prepared for a somewhat higher crime rate and cultural differences.

On the flip side, if you're in Jakarta for a brief stint or want hassle-free living, renting is the way to go. Buying comes with significant transaction costs, and it may take years to recoup them through rental income or property appreciation.

Jakarta's flooding and sinking land issues can add maintenance costs and headaches, making renting a more straightforward option. Additionally, rental yields are relatively low, so don't expect to strike it rich with property investments here.

Lastly, if you're not keen on navigating cultural differences or dealing with complex permits, renting provides flexibility and peace of mind. In the end, the decision hinges on your circumstances, and it's vital to weigh the pros and cons carefully before diving into Jakarta's property market.

Make sure you understand the real estate market in Jakarta

Don't rush into buying the wrong property in Indonesia. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.

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The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.