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Medan's property market is experiencing exceptional growth in 2025, with residential properties leading the surge as infrastructure development and foreign investment drive demand.
As Indonesia's fourth-largest city and North Sumatra's economic hub, Medan offers compelling opportunities for both investors seeking strong returns and residents looking for affordable living compared to Jakarta or Bali.
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.
Medan's property market is booming with house prices up 67.8% and apartments rising 47.7% in 2025, driven by infrastructure upgrades and foreign investment.
The city offers moderate rental yields of 4-6% annually while maintaining significantly lower property costs than Jakarta, making it attractive for both investment and relocation purposes.
| Property Aspect | Current Performance (2025) | Market Outlook |
|---|---|---|
| House Prices | +67.8% annually | Strong growth continuing |
| Apartment Prices | +47.7% annually | Steady appreciation expected |
| Rental Yields | 4-6% annually | Stable moderate returns |
| Average Sale Time | 2-3 months | Liquid market conditions |
| Foreign Investment | IDR 3.87 trillion (H1 2023) | Growing international interest |
| Population Growth | 1.64% annually (2.5M+) | Sustained housing demand |
| Infrastructure Impact | Major transport upgrades | Enhanced connectivity benefits |
What's the current trend in residential property prices in Medan?
Medan's residential property market is experiencing exceptional growth as of September 2025, with house prices surging by 67.8% annually and apartments climbing 47.7% year-over-year.
This remarkable performance significantly outpaces Indonesia's national property price index, which rose only 1.1% in Q1 2025. Houses lead the market with the strongest appreciation, reflecting robust domestic demand and limited supply in established neighborhoods.
The surge is driven by Medan's strategic position as North Sumatra's economic hub, infrastructure investments including toll road expansions, and growing foreign direct investment totaling IDR 3.87 trillion in the first half of 2023. City center apartments command premium prices of IDR 2-3 billion in areas like Medan Baru, while suburban properties offer more affordable entry points.
Unlike Jakarta's sluggish market performance, Medan has maintained strong price momentum throughout 2024 and 2025. This growth trajectory positions Medan as one of Indonesia's most dynamic secondary property markets.
Commercial properties have also appreciated at 13.8% annually, with land values rising 7.5% in central areas and 6% in suburban zones, indicating broad-based market strength across all property categories.
How have rental yields for apartments and houses in Medan changed over the past year?
Rental yields in Medan have moderated to 4-6% annually as of September 2025, representing a slight decline from previous years but remaining competitively attractive for investors.
City center apartments in Medan command approximately IDR 3.17 million in rental income, substantially higher than suburban properties at IDR 1.6 million. This price differential creates higher rental yield potential in urban areas, making central locations particularly attractive for investment purposes.
Commercial properties in hotspots like Kampung Baru deliver stable rental yields of 4-5%, supported by vibrant markets and ongoing development activity. These yields reflect strong local demand and commercial activity in traditional market areas.
Apartments outside the city center generate gross rental yields around 3.97%, which matches or exceeds returns in other major Indonesian cities. The slight yield compression reflects property price appreciation outpacing rental growth, a common trend in rapidly appreciating markets.
Despite the modest decline, Medan's rental yields remain significantly more attractive than Jakarta's CBD areas, where yields can drop as low as 2.45% due to higher property prices and intense competition.
What's the average time it takes to sell a property in Medan right now?
Properties in Medan currently sell within 2-3 months on average, demonstrating healthy market liquidity and balanced supply-demand dynamics as of September 2025.
This timeframe varies by location and property type, with premium properties in Medan Baru and central areas typically moving faster due to strong investor and end-user demand. Luxury condominiums and houses near business centers often sell within 6-8 weeks.
Suburban properties and budget-friendly options in areas like Sunggal and Kampung Baru may take slightly longer, averaging 10-12 weeks, but still within the healthy market range. The extended timeline reflects more deliberate buyer decision-making in affordable segments.
Commercial properties, particularly in emerging hotspots like Kampung Baru, experience similar selling periods of 2-3 months, supported by growing business activity and mixed-use development interest.
The relatively quick turnover indicates strong market confidence and liquidity, contrasting favorably with slower-moving markets in other Indonesian secondary cities where properties may remain on the market for 4-6 months.
Which neighborhoods in Medan are seeing the fastest growth in demand?
| Neighborhood | Growth Rate | Key Drivers |
|---|---|---|
| Medan Baru | Premium segment leader | Business district proximity, luxury condos IDR 2-3 billion |
| Kampung Baru | +10.7% expected in 2025 | Commercial hotspot, vibrant markets, mixed-use development |
| Sunggal | Emerging growth area | Affordable land, developer interest, residential expansion |
| Northern areas | Infrastructure-driven | Transport upgrades, toll road connectivity improvements |
| Eastern outskirts | Future boom potential | Mass Transit Program Support Project, accessibility enhancement |
| Polonia | Upscale expansion | Green spaces, established expat community, large homes |
| Suburban corridors | +6% land appreciation | Infrastructure connectivity, affordable pricing advantage |
What is the current level of new housing supply and upcoming development projects in Medan?
Medan is experiencing healthy growth in residential inventory driven by both local developers and foreign investment, with new high-end projects concentrated in central and suburban locations as of September 2025.
The city benefits from Indonesia's national "One Million Houses" program, which aims to provide affordable housing while stimulating construction activity. Government incentives including VAT exemptions on units priced up to IDR 5 billion support continued development momentum.
Major upcoming projects include mixed-use developments like superblocks that combine residential, commercial, and entertainment spaces. The Maimun Superblock exemplifies this trend with eco-friendly design addressing urban density challenges through vertical integration.
Northern neighborhoods are seeing significant development activity tied to infrastructure projects, particularly the Trans-Sumatra Toll Road expansion. Eastern areas benefit from the Indonesian Mass Transit Program Support Project, creating new development opportunities along improved transport corridors.
Supply remains limited in prime central areas despite new construction, maintaining price pressure in desirable neighborhoods. However, suburban areas offer ample development opportunities with more affordable land prices attracting both local and international developers seeking growth potential.
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How has foreign and local investor activity in Medan's property market shifted recently?
Local investors continue driving most residential demand in Medan, while foreign investment activity has strengthened significantly, particularly from Malaysian and Singaporean buyers attracted by the city's strategic location and economic ties.
Foreign direct investment reached IDR 3.87 trillion during the first half of 2023, demonstrating growing international confidence in Medan's economic prospects. This investment flow supports both residential and commercial property demand from expatriate workers and multinational companies.
International corporations including Asian Agri, London Sumatra, Musim Mas, Philips Lighting, and DBS Bank maintain significant operations in Medan, creating steady demand for quality housing from professional expatriate communities. The city's role in the Indonesia-Malaysia-Thailand Growth Triangle enhances its appeal to regional investors.
Premium segments attract the most foreign interest, especially luxury apartments in Medan Baru and high-end developments near business districts. Foreign buyers focus on properties offering modern amenities and proximity to international business centers.
Local investment remains robust across all price segments, supported by Medan's population growth of 1.64% annually and job creation in manufacturing, services, and technology sectors. Government incentives including relaxed loan-to-value ratios further stimulate domestic buyer activity.
What government policies, taxes, or incentives are directly affecting Medan's real estate market this year?
The Indonesian government has implemented several favorable policies supporting Medan's property market in 2025, including VAT exemptions on residential units priced up to IDR 5 billion and a 25 basis-point interest rate cut to 5.75%.
Foreign buyers can purchase apartments in Medan but face restrictions on landed properties, with minimum investment thresholds around USD 65,000 for apartments in North Sumatra. These regulations remain stable with no major new restrictions implemented in 2025.
Special Economic Zones (SEZs) offer tax breaks and integrated infrastructure, making Medan increasingly attractive for foreign investors. These zones provide streamlined investment procedures and enhanced business environments for international companies.
The government's "One Million Houses" program continues providing support for affordable housing development, while property tax incentives favor eco-friendly projects as part of Indonesia's carbon pricing system and upcoming carbon tax implementation.
Current tax rates include 20% on rental income for non-resident owners, 10% VAT on gross rental income, and 5% capital gains tax on property sales. Sales of luxury properties above IDR 30 billion face 20% sales tax, though this primarily affects ultra-premium segments.
How are infrastructure projects—like new roads, airports, or transit—impacting property demand in Medan?
Major infrastructure upgrades are significantly boosting property demand and values across Medan, particularly the Trans-Sumatra Toll Road project and Bus Rapid Transit system expansion.
The Kuala Tanjung-Tebing Tinggi Parapat segment of the toll road will cut travel time from Medan to Kisaran by half, dramatically improving connectivity for northern neighborhoods. Properties near these new transport routes are experiencing accelerated appreciation and investor interest.
Kualanamu International Airport improvements and the expanded Belawan Port infrastructure enhance Medan's role as a regional hub, attracting multinational companies and supporting demand for both residential and commercial properties. The airport city development creates additional economic activity zones.
The Indonesian Mass Transit Program Support Project focuses on eastern Medan areas, transforming accessibility through enhanced public transport systems. Historical data from cities like London shows transport infrastructure can boost nearby property values by over 30%.
Port Belawan's expansion supports logistics and trade activities, driving demand for commercial real estate including warehouses and distribution centers. It's something we develop in our Indonesia property pack regarding infrastructure impact analysis.
What's the outlook for commercial property demand in Medan compared to residential?
Residential demand significantly exceeds commercial property growth in Medan, though select commercial hotspots show notable appreciation and investment potential as of September 2025.
Residential properties lead with house prices rising 67.8% and apartments 47.7% annually, while commercial properties show steady but more modest appreciation at 13.8% annually. This gap reflects stronger fundamental demand drivers in the residential sector.
Kampung Baru emerges as the standout commercial area with property prices expected to rise 10.7% in 2025, driven by vibrant traditional markets and new mixed-use developments. Commercial rental yields in this area reach 4-5%, indicating healthy investment returns.
The growth of coworking spaces and tech hubs demonstrates Medan's evolution as a business center, creating demand for modern office space. However, this demand remains concentrated in specific districts rather than city-wide growth.
Long-term forecasts favor residential properties due to population growth, urbanization trends, and job creation across multiple sectors. Commercial real estate offers opportunities in select locations but requires more targeted investment strategies compared to the broader residential market appeal.
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.
How do current mortgage rates and financing availability affect property buyers in Medan?
Current mortgage rates and financing conditions in Medan remain supportive for property buyers, with the Indonesian central bank's rate cut to 5.75% in 2025 making homeownership more accessible for middle-class purchasers.
The 25 basis-point rate reduction directly benefits first-time buyers and expands the pool of qualified purchasers in Medan's market. Lower borrowing costs increase purchasing power and support continued demand across residential segments.
Government relaxed loan-to-value ratios further assist buyer financing, particularly beneficial for domestic purchasers seeking to enter the property market. These measures complement VAT exemptions on properties under IDR 5 billion to stimulate transaction activity.
Mortgages remain affordable relative to wage growth in Medan, where living costs stay among Indonesia's most reasonable for a major city. A single person requires approximately IDR 11.6 million monthly for comfortable living, making property ownership attainable for working professionals.
Foreign buyers face different financing constraints, typically requiring larger down payments and dealing with complex legal structures for apartment ownership. However, the overall financing environment supports both domestic and international investment activity in the market.
What demographic or population trends are driving housing demand in Medan?
Strong population growth from urbanization and inward migration continues driving robust housing demand in Medan, with the city reaching 2.5 million residents and growing at 1.64% annually as of September 2025.
Rural-to-urban migration from across North Sumatra brings job-seekers to Medan's expanding economy, creating sustained demand for housing across all price segments. The city's role as the region's economic hub attracts workers in manufacturing, services, and technology sectors.
Medan's affordable living costs compared to Jakarta and Bali make it particularly attractive for young families and professionals seeking quality of life improvements. Monthly living expenses of IDR 11.6 million for singles and IDR 26.7 million for families enable broader homeownership participation.
The growing expatriate community, supported by multinational company operations, drives demand for premium housing with modern amenities and international school access. This demographic focuses on central locations and upscale developments in areas like Medan Baru and Polonia.
An aging population trend is also reshaping housing demands, with increased focus on accessible housing designs and healthcare proximity. This demographic shift creates opportunities for specialized housing developments catering to senior residents' needs.
What risks or challenges—such as oversupply, regulations, or economic shifts—should property investors in Medan be aware of?
- Oversupply risk in outlying areas: Some neighborhoods experience high vacancy rates in new developments, leading to downward pressure on prices and rental yields in oversupplied zones.
- Foreign ownership restrictions: Non-citizens remain limited to apartment ownership with leasehold rights of 80-100 years maximum, preventing freehold ownership of landed properties and complicating investment structures.
- Economic uncertainty: Rapid mortgage rate increases or sudden market oversupply could affect pricing dynamics and property liquidity, requiring careful market timing considerations.
- Flood risk regulations: Increasing environmental concerns and stricter building regulations in flood-prone areas may impact development costs and property values in vulnerable locations.
- Market concentration risk: Heavy dependence on infrastructure projects for growth means delays or cancellations of major developments could significantly impact neighborhood appreciation rates.
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.
Medan's property market presents compelling opportunities in 2025, with exceptional price growth, moderate rental yields, and strong infrastructure development supporting both investment and residential purposes.
It's something we develop in our Indonesia property pack with comprehensive analysis of market dynamics, legal requirements, and investment strategies for successful property acquisition in Indonesia's growing secondary markets.
Sources
- Global Property Guide - Indonesia Property Market Analysis
- BambooRoutes - Medan Property Price Forecasts
- BambooRoutes - Is It Worth Buying Property in Medan
- BambooRoutes - Medan Real Estate Trends
- Mordor Intelligence - Indonesia Real Estate Market Report
- BambooRoutes - Medan Real Estate Forecasts
- Indonesia Investments - Property Market Analysis
- Let's Move Indonesia - Property Market 2025