Authored by the expert who managed and guided the team behind the Indonesia Property Pack
Yes, the analysis of Jakarta's property market is included in our pack
Are you considering investing in a rapidly growing city? Wondering if Jakarta's property market is the right choice for your future? Curious about the benefits of buying property in Indonesia's bustling capital?
We will lay down recent insights, ici no guesswork, we rely only on solid data.
Actually, we know this market inside and out. We keep tabs on it regularly, and all our discoveries are reflected in the most recent version of the Indonesia Property Pack
1) Jakarta's population growth exceeds housing supply driving property values higher
Jakarta's population has surged to around 11.3 million in 2024, creating a bustling urban environment.
This rapid growth means the city is now home to about 17,000 people per square kilometer, putting a strain on housing availability. The demand for homes is skyrocketing, but the supply just can't keep up.
By 2024, the housing shortage hit 11 million units, with low-income communities feeling the pinch the most. They make up a staggering 93% of this backlog, making it tough for many to find affordable places to live.
Even though more high-rise apartments are popping up, they're often out of reach for the average Jakarta resident. The middle class is caught in a bind, struggling to find homes that fit their budget.
The Jakarta Property Institute suggests that building 1 million apartments a year is doable, but the real hurdle is making them affordable for locals. This is a crucial step to ease the housing crunch.
Sources: Asian News Network, Kompas, The Jakarta Post
2) Jakarta offers high rental yields delivering strong returns for investors
Jakarta offers impressive rental yields, making it a hotspot for property investors.
In 2024, the average gross rental yield in Jakarta was about 5.68%, which is significantly higher than in other major Southeast Asian cities like Singapore or Hong Kong, where yields hover around 2-3%. This makes Jakarta a compelling choice for those seeking better returns on their investments.
Jakarta's rental market is buoyed by a growing expatriate population, especially in areas like the SCBD. This influx has driven up rental prices and kept occupancy rates high, ensuring a steady demand for rental properties.
Indonesia's political stability and ongoing infrastructure development are also key factors. These elements are not only enhancing property values but are also attracting more foreign direct investment, which in turn boosts the demand for serviced apartments in Jakarta.
With these dynamics at play, investors are finding Jakarta's property market to be a lucrative opportunity. The combination of high rental yields and a strong demand for rentals makes it an attractive option.
Sources: Global Property Guide, InvestAsian, Expat Life Indonesia
Everything you need to know is included in our Pack for Jakarta
3) Jakarta's role as Indonesia's economic hub draws a constant stream of professionals needing housing
Jakarta is Indonesia's economic powerhouse, drawing professionals in search of housing.
With its bustling business districts like the Sudirman Central Business District (SCBD), Jakarta is a magnet for multinational companies. This influx of businesses means more professionals are flocking to the city, driving up the demand for housing. The city is not just attracting local talent; it's also seeing a rise in expatriates from countries like Japan, India, Korea, and China, who are moving in for high-level positions.
Jakarta's population is growing steadily, thanks to both natural increase and rural-to-urban migration. This growth is fueling a need for more housing, especially in the affordable and mid-range sectors. The city's appeal is further enhanced by ongoing government infrastructure projects like the MRT and LRT systems, which make commuting easier and outlying areas more attractive.
These infrastructure improvements are not just about convenience; they also make Jakarta more appealing as a business hub, which in turn affects real estate prices. The city's economic vitality is underscored by Indonesia's consistent GDP growth, which boosts consumer confidence and purchasing power, leading to a higher demand for residential properties.
For those considering a move, it's worth noting that the expatriate housing market is expanding. Many expats are settling in Jakarta, drawn by the city's vibrant business environment and the opportunities it offers. This trend is particularly evident in areas with a high concentration of international companies.
In summary, Jakarta's status as an economic hub is a key factor in its growing housing market. The city's dynamic business scene, coupled with improved infrastructure and a strong economy, makes it an attractive destination for both local and international professionals.
Sources: Real Estate Asia, Social Expat, Jakarta Real Estate Market
4) Jakarta's neighborhoods provide diverse investment opportunities from luxury to affordable housing
Jakarta's neighborhoods offer a wide range of investment opportunities, from luxury to affordable housing.
In recent years, areas like the Sudirman Central Business District (SCBD) have become hotspots for young professionals and corporate expats. This has led to a surge in property values and a high demand for modern apartments, with rental yields ranging from 6-7% annually. The appeal of these areas is not just their central location but also their vibrant lifestyle, making them a magnet for those seeking a dynamic urban experience.
Luxury apartments in Sudirman and Kuningan are particularly sought after due to their proximity to international schools, embassies, and high-end shopping centers. These areas offer rental income for well-maintained apartments that can yield around 5-6% annually. The foreign demand for luxury properties is also on the rise, especially in business and tourism hotspots, with significant interest in properties priced between IDR 1 billion to IDR 3 billion.
Meanwhile, Jakarta's growing middle-class population is driving the demand for affordable housing. Suburban areas like Cengkareng, Bekasi, and Tangerang are becoming popular for their budget-friendly options. These areas are supported by government initiatives such as VAT waivers on residential purchases, making affordable housing more accessible and attractive to a broader range of investors.
For those looking to invest in Jakarta, understanding the city's diverse neighborhoods is key. Whether you're interested in the bustling city life of SCBD or the more relaxed suburban areas, there's something for every investor. The city's infrastructure development, including new transportation links, is also enhancing the appeal of these neighborhoods, offering long-term growth potential.
Investors should keep an eye on the evolving market trends and government policies that continue to shape Jakarta's real estate landscape. With its mix of luxury and affordable options, Jakarta remains a promising destination for property investment.
Sources: JLL, InvestAsian, Invest in Asia
5) Jakarta's booming digital economy draws tech professionals seeking housing
Jakarta's digital economy is booming, making it a hotspot for tech professionals seeking new opportunities.
With over 2,400 tech startups in the city, Jakarta is buzzing with innovation in sectors like fintech and e-commerce. Big names like Gojek and Tokopedia are leading the charge, each valued at $10 billion and drawing in millions of users.
Foreign investors are taking notice, pouring money into Jakarta's tech scene. The digital economy is on track to hit $109 billion by 2025, with even more growth expected by 2030. This influx of cash is turning Jakarta into a magnet for tech talent.
The Indonesian government is also playing a big role, backing initiatives like the Digital Indonesia Roadmap 2021-2024. They're rolling out a 5G network, boosting cybersecurity, and setting up a national data center, all of which make Jakarta a fertile ground for tech companies.
Jakarta's rise as a tech hub is also fueled by the growth of co-working spaces and tech hubs. These spaces cater to the collaborative nature of startups and are supported by the government's push for better digital infrastructure, including high-speed internet.
Tech professionals are flocking to urban areas, driving up demand for housing in tech-centric neighborhoods. The appeal lies in the availability of co-working spaces, fast internet, and amenities that fit a tech lifestyle, causing property prices to climb as tech workers seek homes close to their workspaces.
Sources: Trade.gov, Nucamp, Oxford Business Group
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6) Jakarta's location in Southeast Asia boosts international business and drives real estate demand
Jakarta is a hotspot for international business, boosting real estate demand.
In 2023, Indonesia saw a 13.7% rise in foreign direct investment, showing its growing allure to global investors. This trend is likely to persist, with countries like Switzerland maintaining a keen interest in Indonesia. The city's business-friendly vibe and improving infrastructure are big draws for multinational companies setting up regional headquarters here.
By 2024, the demand for Grade A office space in Jakarta's Central Business Districts, especially in the "golden triangle," has surged. There's now over 3 million square meters of top-notch office space available, catering to the needs of these international businesses. This area is buzzing with activity, making it a prime location for companies looking to make their mark in Southeast Asia.
Jakarta's central spot in Southeast Asia makes it a perfect gateway for businesses aiming to expand into the ASEAN region. This strategic location is a key driver of economic growth, continually attracting international businesses. The city is not just a business hub; it's a launchpad for companies eyeing the broader Southeast Asian market.
Special economic zones around Jakarta are being developed to lure even more foreign investment. These zones are designed to enhance the city's competitiveness, making it an even more attractive place for businesses to set up shop. The combination of strategic location and these economic zones is a powerful magnet for international companies.
With all these factors in play, Jakarta is not just a city; it's a thriving business ecosystem. The city's strategic positioning and ongoing developments are set to keep it at the forefront of international business in the region.
Sources: ASEAN Briefing, JLL Indonesia, Swiss Economic Report
7) Urban development in Jakarta is rapidly turning underdeveloped areas into prime real estate locations
Jakarta is undergoing a remarkable urban transformation that's catching the eye of potential property buyers.
The Indonesian government is heavily investing in infrastructure, with projects like the Greater Jakarta's LRT and the Jakarta-Bandung High-Speed Train, both launched in 2023. These developments have not only improved connectivity but also boosted international tourism, leading to higher hotel occupancy and room rates.
Property values are rising in areas once considered underdeveloped. The market in Jakarta is showing resilience, with steady occupancy rates in both the CBD and surrounding areas. This trend highlights a growing demand for premium office spaces and residential properties, especially in South Jakarta.
Major transportation projects, such as the MRT and LRT lines, have made these areas more accessible, turning them into attractive spots for development. This accessibility has led to a surge in demand for properties with good transportation links, further driving up property values.
South Jakarta, in particular, is becoming a hotspot for real estate, thanks to its improved infrastructure and connectivity. The city's ongoing urban development projects are transforming underdeveloped areas into prime real estate locations, making it a promising investment opportunity.
For those considering buying property in Jakarta, these developments offer a chance to invest in a city that's rapidly evolving and becoming more connected. The combination of government investment and rising property values makes Jakarta an exciting place for real estate investment.
Sources: JLL, Invest Indonesia
8) Jakarta's location makes it the key hub for business and travel in Indonesia
Jakarta's strategic location near major cities like Bandung and Surabaya makes it a central hub for business and travel.
With 5.3 million international passengers passing through Soekarno-Hatta International Airport in the first eight months of 2024, Jakarta's role in global travel is undeniable. This bustling airport is a testament to the city's importance as a gateway to Indonesia and beyond.
Efforts to expand Jakarta's rail network are underway, promising to make connections with other cities even smoother. This development is set to enhance Jakarta's status as a key business and travel destination, making it easier for people to move around.
Jakarta's proximity to other major Indonesian cities not only facilitates travel but also boosts business opportunities. The ease of access to these cities means that businesses can thrive by tapping into a larger market and workforce.
As the city continues to grow, its infrastructure developments are crucial in maintaining its position as a central hub. The ongoing improvements in transportation are designed to support Jakarta's expanding role in the region.
With these advancements, Jakarta is poised to remain a vital link in Indonesia's economic and travel landscape, ensuring that it stays at the forefront of regional connectivity.
Sources: The Jakarta Post, PwC
Everything you need to know is included in our Property Investment Pack for Jakarta
9) Public transport upgrades in Jakarta are boosting investment appeal in previously hard-to-reach areas
Jakarta's public transportation system has transformed, making previously hard-to-reach areas more appealing for investment.
The Jakarta MRT's daily average of 91,771 passengers in 2023 shows a strong recovery and growth, indicating that more people are choosing public transport. This shift makes these areas more accessible and attractive for businesses and investors.
Expansion plans for the LRT Jakarta, like the Dukuh Atas-Pesing and Kelapa Gading-JIS phases, aim to connect people to various transport modes. This integration is crucial as it links different city parts, making travel easier and business operations more efficient. The government's hefty investment, with phase 1D alone costing around Rp13.4 trillion, highlights their commitment to infrastructure, boosting investor confidence.
Public transport integration with economic centers has increased demand for residential and commercial properties. Areas served by Transjakarta, such as the Jakarta International Stadium, are seeing a rise in property values. Real estate market analyses predict growth in transit-oriented developments, showing that improved public transport is making these areas more attractive for investment.
The Jakarta MRT's high on-time performance of 99.44% enhances commuter satisfaction by reducing travel times. This reliability makes commuting more convenient, encouraging more people to live and work in previously less accessible areas. Media reports highlight neighborhood transformations due to improved accessibility, showcasing how the revitalization of BRT stations and integration with walking and cycling networks have made Jakarta less car-dependent.
Sources: Crux Alliance, Antara News, PwC Indonesia
10) Jakarta's landmarks draw tourists and boost short-term rental opportunities
Jakarta's historical and cultural landmarks are a magnet for tourists, boosting short-term rental opportunities.
In recent years, international arrivals to Indonesia have surged, with millions flocking to explore Jakarta's rich history and vibrant culture. This influx of tourists is a testament to the city's allure, making it a hotspot for those seeking unique experiences.
Short-term rentals in Jakarta are thriving, especially around iconic spots like the National Monument and Kota Tua. These areas are in high demand because tourists prefer staying close to major attractions, ensuring they make the most of their visit. Consequently, occupancy rates for these rentals are impressive, with properties being booked frequently throughout the year.
The rise in Airbnb listings in Jakarta highlights a growing trend among property owners who recognize the potential of short-term rentals. This trend is bolstered by positive reviews and high ratings from satisfied tourists, which further enhances the appeal of these accommodations.
Tourism not only boosts the rental market but also significantly contributes to the local economy. The influx of visitors translates into increased revenue and job creation, making tourism a vital component of Jakarta's economic landscape.
Sources: Nation Thailand, Airbtics, Kadence
11) Jakarta's healthcare facilities are improving making it a more desirable place to live
Jakarta's healthcare facilities are on the rise, making it a more appealing place to live.
The Indonesian government is pouring resources into healthcare, especially in 2023, focusing on revamping community health centers and integrated service posts. This effort is expected to boost the connected healthcare market, which is set to grow significantly in the coming years. Jakarta is seeing more hospitals and clinics being built or upgraded, enhancing the city's healthcare landscape.
For instance, Java's government plans to build an international-standard hospital in Depok, aiming to improve residents' quality of life. Private hospitals like RS Premier Jatinegara are gaining recognition for their top-notch care, consistently winning awards as Indonesia's best hospital.
Digital health technologies are transforming Jakarta's healthcare scene. The Universitas Indonesia Hospital has launched a digital app that offers telemedicine, remote monitoring, and AI features, improving access to quality health services citywide.
These tech advancements, along with more specialized medical services, make Jakarta a go-to spot for quality medical care. Residents now have better access to specialized treatments, thanks to these improvements.
Sources: Setkab, Mordor Intelligence, International Insurance
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12) Expatriate families are moving to Jakarta for its international schools and need housing
Jakarta's international schools are a major attraction for expatriate families looking for housing.
In recent years, the number of expatriate families moving to Jakarta has increased significantly. For example, newcomers in DKI Jakarta jumped from 113,814 in 2020 to 151,752 in 2022. This surge highlights the growing interest in the city, especially among those seeking quality education for their children.
Expatriate families are particularly drawn to neighborhoods near international schools, which has led to a surge in housing demand in these areas. Real estate market reports indicate that property values are higher near these schools, reflecting their popularity. Surveys consistently show that proximity to international schools is a top priority for expatriate families when choosing where to live.
Jakarta's appeal as an educational hub is further emphasized by the growth of international schools like the German School Jakarta and Jakarta Intercultural School. These institutions offer globally recognized curricula and excellent facilities, making them highly attractive to global families. Real estate agents note that expatriate families often prioritize housing near these schools due to the quality of education and living standards they provide.
For expatriate families, living close to these schools means more than just convenience; it’s about ensuring their children receive a top-notch education. The presence of such schools in Jakarta not only boosts the city's reputation but also drives the real estate market, as families are willing to invest in properties that offer easy access to these educational institutions.
Sources: Expat Life Indonesia, GSIN Education, German School Jakarta
13) Jakarta's vibrant culture makes city living highly appealing
Jakarta's vibrant cultural scene makes living in the city incredibly appealing.
In recent years, the city has become a hub for cultural festivals and events. Take Art Jakarta 2024, for example, which expanded by 20% and featured 73 exhibitors from around the globe, drawing in a record-breaking 38,368 visitors. This surge in cultural happenings shows a growing passion for arts and culture among both locals and tourists.
Jakarta is a true melting pot, with a mix of cultures, ethnicities, and religions that create a rich cultural tapestry. This diversity is evident in the city's bustling street food scene, which reflects its multicultural identity. The variety of cultural communities not only enriches the city's offerings but also builds a strong sense of community and belonging among residents.
On the international stage, Jakarta's cultural scene is gaining recognition. Events like the OPPO Art Jakarta exhibition are noted as some of the largest art showcases in Southeast Asia. This international acclaim boosts the city's global cultural appeal, attracting more visitors and artists from around the world, which in turn enhances the city's cultural vibrancy.
Living in Jakarta means being part of a city where cultural events are not just frequent but also diverse and inclusive. The city's cultural landscape is a testament to its dynamic and ever-evolving nature, making it an exciting place to call home.
Sources: World Cities Culture Forum, The S Media, The Jakarta Post
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.