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What will happen in Medan’s real estate market? Will prices go up or down? Is Medan still a hotspot for foreign investors? How is Indonesia’s government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with notaries, real estate agents, and clients who buy properties in Medan, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
1) Stricter regulations in Medan will affect future housing projects in flood-prone areas
Medan has been hit hard by floods in recent years, with severe events in September and November 2023.
These floods, caused by overflowing rivers and heavy rainfall, have shown just how vulnerable some areas are. The damage was extensive, especially in September, and it’s clear that something needs to change to protect properties and infrastructure.
The Indonesian government is stepping up, recognizing the need for stricter zoning laws in these flood-prone areas. Reports from the AHA Centre are pushing for better flood management, hinting at tougher rules on the horizon.
Experts warn that climate change is only going to make things worse in Medan, with rising sea levels and more rain putting extra pressure on the city’s flood defenses. This scientific insight is backing the call for tighter regulations.
Local communities, who have felt the brunt of these floods, are speaking out. Their voices are loud and clear, demanding stronger regulations to prevent future disasters, and the government is listening.
Media coverage has been relentless, showing the real impact of these floods on homes and infrastructure. This has made people more aware of the risks, adding to the push for stricter building rules in risky areas.
Sources: ReliefWeb, ReliefWeb, Southern Environmental Law Center
2) Property prices in Medan's eastern outskirts will rise significantly due to new transportation links improving accessibility
The eastern outskirts of Medan are on the brink of a property boom, thanks to new transportation links.
With the Indonesian Mass Transit Program Support Project (IMTPSP) in full swing, Medan is seeing a transformation. This project is all about boosting accessibility by enhancing public transport systems, especially in eastern Medan. The government is pouring resources into this area, making it a hot spot for future growth.
New highways and Bus Rapid Transit (BRT) lines are now connecting eastern Medan to the city center like never before. This improved connectivity is a game-changer, attracting both residents and investors. Historically, when infrastructure gets a facelift, property prices tend to climb. Just look at how areas with better transport links often boast higher property values compared to more isolated spots.
Urban development plans, like the Medium-Term National Development Plan (RPJMN) for 2020-2024, are spotlighting eastern Medan as a key growth area. These plans are all about enhancing urban mobility, and eastern Medan is right in the crosshairs for future development. As transport links get better, businesses and amenities usually follow, making the area even more appealing for living and investment.
We've seen this pattern before: infrastructure improvements lead to a surge in commercial activity, which in turn drives up property prices. It's a cycle that benefits those who get in early. Eastern Medan is poised to become a bustling hub, with increased commercial activity on the horizon.
So, if you're thinking about buying property, keep an eye on eastern Medan. With all these changes, it's set to become a prime location, offering both convenience and potential for significant returns on investment.
Sources: Indonesia Real Estate, World Bank Document
We made this infographic to show you how property prices in Indonesia compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
3) Rental prices in Medan will rise in areas with new public transport, boosting their appeal
Rental prices in Medan are on the rise, especially in areas with new public transport links.
When public transport improves, property values often go up, making these areas more attractive. Take Medan's Bus Rapid Transit (BRT) system, for instance. It's expected to boost property values nearby, drawing in both residents and investors. People love the convenience of easy access, and this trend is not unique to Medan.
Looking at other cities, when efficient public transport systems are introduced, property values tend to climb. Medan's BRT system is likely to follow this pattern, pushing rental prices higher. This isn't just speculation; it's a trend seen in many urban developments.
The Indonesian government is pouring money into public transport, like the $224 million Indonesia Mass Transit Project. This kind of investment aims to make urban areas more accessible, which in turn attracts more people and businesses. More people means more demand for housing, and that demand drives up rental prices.
As public transport links get better, more folks want to live in these well-connected areas. Convenience is a big draw, and as more people seek it, rental prices naturally increase. It's a cycle that benefits those who invest early in these areas.
Sources: Mobilise Your City, World Bank
4) Foreign investment in Medan's residential properties will grow as international companies expand in the city
Medan is becoming a hotspot for foreign investment, with IDR 3.87 trillion pouring in during the first half of 2023.
International companies are setting up shop in Medan, drawn by opportunities like the Medan Medical Tourism program, which has even caught the attention of Singapore's healthcare sector. This initiative is expected to bring more expatriates, boosting the demand for homes.
The Indonesian government is sweetening the deal with Special Economic Zones (SEZs) that offer tax breaks and integrated infrastructure, making Medan's property market even more tempting for foreign investors.
Infrastructure is getting a major upgrade too. Projects like the Kuala Namu Airport City are enhancing connectivity, making Medan more accessible and appealing for international businesses looking to expand.
With these developments, Medan is not just a city on the rise; it's a place where foreign investors are finding real opportunities in the residential property market.
Sources: InCorp Asia, Intellizence, ASEAN Briefing
5) Rents in Medan's older neighborhoods will drop as new developments offer better amenities
Medan is buzzing with new residential developments that boast modern amenities.
Imagine living in a place like The Manhattan Medan, where you can enjoy a swimming pool with a city view or relax in a sky lounge. These features are not just luxuries; they are becoming the norm for renters who crave convenience and style.
Today's renters have a clear preference for modern amenities, with a whopping 90% wanting high-speed internet. This trend is making older neighborhoods, which often lack these perks, less attractive.
Older areas in Medan are facing a challenge. Their housing stock is aging and can't compete with the comfort and convenience of newer developments. This shift is causing rental prices in these areas to drop.
Tenants are increasingly drawn to properties that offer more than just a roof over their heads. They want a lifestyle, and modern, amenity-rich properties are delivering just that.
As newer developments continue to pop up, older neighborhoods are struggling to keep up, leading to a decline in rental demand in these areas.
Sources: davysukamta.com, rentalhousingjournal.com, planning.org
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6) Mid-range property prices in Medan will gradually decline as affordable housing projects expand
Medan is seeing a boom in affordable housing projects, thanks to government efforts to revamp slum areas like Belawan.
The government is on a mission to improve living conditions by building flats for those in illegal settlements and upgrading legally owned homes. This is part of a larger plan to cut extreme poverty by 2024, which also involves infrastructure improvements to attract developers to affordable housing.
With Medan's rapid urbanization and population growth, the demand for affordable housing is skyrocketing. The government is stepping up to meet this need, as seen in the Public Works and Public Housing Ministry's work in Belawan. Integrated planning and infrastructure development are key to their strategy, showing a strong commitment to expanding affordable housing.
Looking ahead to 2025, the housing market is expected to see slower price growth in the mid-range sector. This could be due to an oversupply, as builders focus on affordable options. Mortgage buydowns and incentives are becoming more common, as developers explore cheaper markets.
These trends suggest that Medan's affordable housing projects will continue to grow, which might lead to a gradual decline in mid-range housing prices. Builders are keen to tap into this demand, offering more budget-friendly options.
As the city evolves, the focus on affordable housing is reshaping the market. Developers are increasingly drawn to Medan, seeing opportunities in the affordable sector.
Sources: Antara News, Green Builder Media
7) Property prices in central Medan will stabilize as high-density developments saturate the area
Central Medan is experiencing a boom in high-density residential projects, with many new apartment buildings and housing complexes filling up the area.
As the area becomes saturated, there's a balance between available homes and buyers, leading to stabilized property prices due to reduced pressure on the market.
There's also been a slowdown in new construction permits, hinting that local authorities might be capping further developments to manage growth or due to limited land.
With fewer new buildings, the supply of homes remains steady, which helps in keeping prices stable as the market adjusts to the current demand.
Surveys indicate a shift in buyer interest towards suburban areas, as people seek less crowded living environments, reducing demand for city properties.
In saturated markets like Central Medan, the increased supply meets demand, creating a balance that prevents wild price fluctuations.
Sources: National Association of Realtors, Alameda County Planning Department, Green Builder Media
8) Rental yields in Medan's suburbs will drop as more people choose city living
Medan is seeing a shift as more people choose city living over suburban life.
With the city center's population density on the rise, urban amenities are becoming a major draw for residents. This trend is fueled by the city's development, which saw a growth of 1.64% in 2024. As a result, living in the heart of Medan is becoming increasingly attractive.
City center apartments in Medan are priced at about 3,166,667 Rp, significantly higher than the 1,600,000 Rp in the suburbs. This price gap highlights the higher rental yield potential in urban areas, enticing both investors and renters. Improved infrastructure and public transport make commuting a breeze, adding to the city's allure.
Indonesia's economic growth is creating more job opportunities in urban areas, drawing people to Medan's city center. Real estate market reports show a shift in investment focus towards urban properties due to their promising growth and rental yields. This shift is causing suburban areas to see a drop in rental occupancy rates.
As more people flock to the city, suburban areas are experiencing a decline in rental yields. The appeal of city living is undeniable, with its vibrant lifestyle and convenience. Investors are increasingly eyeing urban properties for their potential returns.
With the ongoing urbanization trend, suburban rental markets are feeling the pinch. The city's growth and development continue to attract residents, making urban living the preferred choice for many.
Sources: Numbeo, Macrotrends
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Indonesia. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
9) Medan will impose stricter rules on property purchases by non-residents due to more foreign buyers
In Medan, foreign buyers are increasingly snapping up properties, echoing a national trend in Indonesia.
In 2023, foreign investment in residential properties surged, with many opting for the Right to Build title, a shift from the previously common Right to Use title. This change has made it easier for foreigners to own property, fueling their interest in Medan's market.
As a result, property prices in Medan have been climbing. The composite-16 property price index, for example, saw a 1.74% increase in 2023. This uptick is largely attributed to the influx of foreign buyers, which has sparked concerns about affordability for locals.
Local media have been buzzing about these affordability issues, painting a picture of a market where rising prices are squeezing local buyers. Public opinion surveys echo this sentiment, with many Indonesians expressing unease over the growing foreign presence in the property market.
In Medan, the situation is particularly tense, as locals worry about the availability of affordable housing. The fear is that continued foreign investment will make it even harder for residents to find homes within their budget.
Given these dynamics, it's likely that stricter regulations on property purchases by non-residents will be introduced to protect local interests.
Sources: Global Property Guide, Deloitte
10) Demand for green-certified properties in Medan will rise due to environmental initiatives
In Medan, there's a noticeable buzz around properties with green certifications.
People are becoming more eco-conscious, and this is driving the demand for sustainable homes. The National Association of REALTORS (NAR) 2024 Sustainability Report highlights that nearly half of the respondents have clients interested in sustainability. This shift reflects a broader trend towards eco-friendly living.
The Indonesian government is also stepping up with incentives for green-certified buildings. Programs like the Indonesia Green Affordable Housing Program (IGAHP) aim to build 100,000 green houses by 2024. This initiative shows strong government backing, making these homes more appealing to buyers.
Rising energy costs are another factor pushing people towards energy-efficient homes. The NAR report notes that over half of those surveyed want energy-efficient details in property listings. This trend suggests a growing desire for homes that cut down on energy bills, boosting the appeal of green-certified properties.
In Medan, these environmental initiatives are expected to lead to higher demand for properties with green certifications. As more people look for ways to live sustainably, the market for these homes is likely to grow.
With government support and consumer interest aligning, Medan is poised to become a hotspot for sustainable real estate.
Sources: NAR 2024 Sustainability Report, Business Indonesia
11) Real estate values in Medan will rise as new infrastructure improves connectivity in overlooked areas
Medan is buzzing with new infrastructure projects that promise to reshape the city's connectivity.
One of the standout developments is the 192 km stretch of the Trans Sumatra toll road, set to be completed by the end of 2023. This road will make travel between major Sumatra cities, including Medan, much quicker, opening up new opportunities for growth. Imagine cutting your travel time from Medan to Kisaran in half; that's the kind of change we're talking about.
Medan's government is also pushing forward with the Bus Rapid Transit (BRT) project. This includes 18.5 km of BRT corridors and 26 routes, aiming to serve 350,000 passengers daily. It's designed to offer a faster, more convenient alternative to private vehicles, which could really change how people move around the city.
We've seen this kind of transformation before. Take Jakarta, for instance. When they rolled out their Mass Rapid Transit (MRT) system, property values in connected areas shot up. The same could happen in Medan, especially with the Trans Sumatra toll road making previously overlooked areas more appealing for both living and business.
Surveys show that when public transport improves, more people and businesses flock to those areas, driving up property values. The BRT project in Medan is expected to do just that, sparking interest in properties in newly accessible neighborhoods. Plus, better connectivity often means more commercial activity, which can boost both industrial and tourism sectors.
Sources: PwC, ITDP Indonesia, ITDP Indonesia, ICPA Banyuwangi
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12) Eco-friendly housing investments in Medan will grow due to new property tax incentives
Medan is becoming a hotspot for eco-friendly housing thanks to new property tax incentives.
The Indonesian government is pushing for sustainable development, offering tax breaks to investors who choose eco-friendly projects. This is part of a larger plan that includes a carbon pricing system and a carbon tax set to start in 2025, making green housing more appealing financially.
Medan's rapid growth has created a high demand for housing, and the city is embracing mixed-use models like the Superblock. These developments combine living, shopping, and leisure spaces with a focus on green architecture. The Maimun Superblock is a standout example, showing how eco-friendly design can tackle urban density issues.
Globally, there's a shift towards sustainable living, and Medan is no exception. People are increasingly interested in eco-friendly building materials, which aligns with Indonesia's goals to cut carbon emissions and boost renewable energy. The government's dedication is clear with its renewable energy campaigns and the launch of Southeast Asia's first Emissions Trading System in 2023.
These initiatives are not just about reducing emissions; they're about making sustainable living a reality. The focus on renewable energy and eco-friendly materials is a response to changing consumer preferences, which are increasingly leaning towards sustainability.
For investors, these tax incentives and the growing demand for green housing make Medan an attractive option. The city's commitment to sustainable development is evident, and the new policies are set to make a significant impact.
Sources: Jurnal Kolibi, Climate Action Tracker
13) Smart home features will become standard in new Medan housing developments
Smart home technology is booming in Medan, Indonesia.
Back in 2023, the smart home market in Indonesia was valued at USD 1.31 billion, and it's expected to skyrocket to USD 6.89 billion by 2030. This shows a strong trend towards adopting smart home tech, with a compound annual growth rate of 26.8% from 2024 to 2030. People are really getting into the idea of tech-savvy homes.
In Medan, more and more homebuyers are looking for properties with smart features. Real estate agents have noticed this shift, with many buyers wanting homes that offer convenience, time savings, and enhanced security. It's not just about having a roof over your head anymore; it's about having a smart, connected living space.
The Indonesian government is also pushing for smart city developments, which ties in perfectly with the rise of smart homes. Their focus on decarbonization and sustainable growth is encouraging the use of energy-efficient and secure smart home solutions. This makes smart homes not just a luxury, but a part of a larger movement towards sustainability.
Partnerships between real estate developers and tech companies are making smart homes more accessible. These collaborations are crucial in driving the market forward, making it easier for consumers to embrace this new way of living. It's becoming clear that smart home technology is not just a trend, but a standard feature in new residential developments in Medan.
Sources: Statista, Light Now Blog, 6Wresearch, Exploding Topics, NextMSC
14) Property values will rise along new routes as Medan expands its public transport network
Medan's public transport expansion is set to boost property values along new routes.
Take Chicago, for example. Properties near public transport there have always been in high demand and more valuable. This isn't a new trend; it's been happening since cities started growing. Homes within half a mile of good transit can be worth over 15% more than those further away. Why? Because easy access to transit makes life more convenient, and that naturally pushes up property values.
In Medan, the Indonesia Mass Transit (MASTRAN) Project is a game-changer. It's all about improving urban mobility with new bus rapid transit systems. This will cut down travel times and likely increase property values along these new routes. Medan is already a bustling industrial and economic hub, growing faster than the national average. With new transport infrastructure, this growth is expected to skyrocket, making properties even more valuable.
Medan's strategic location and economic significance mean that any improvement in transport can have a big impact. New routes will not only make commuting easier but also attract more businesses and residents, further driving up property values. This is a classic case of infrastructure development leading to economic benefits.
For potential buyers, this is a golden opportunity. Investing in properties along these new routes could be a smart move. As the transport network expands, these areas are likely to become more desirable, offering both convenience and a good return on investment.
So, if you're considering buying property in Medan, keep an eye on these new transport routes. They could be the key to unlocking future value in the real estate market.
Sources: World Bank, Inland Real Estate School, Tolj Commercial
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.
15) Interest in Medan's northern neighborhoods will rise as infrastructure improvements are planned
The residential real estate market in Medan is buzzing with excitement, especially in the northern neighborhoods, thanks to some big infrastructure plans.
One major project is the Trans-Sumatra Toll Road, particularly the Kuala Tanjung-Tebing Tinggi Parapat segment. This road will make a huge difference by cutting travel time from Medan to Kisaran by half. Imagine how much easier it will be for tourists to visit hotspots like Lake Toba and Kuala Tanjung Port.
On top of that, the Public Works and Public Housing Ministry is pouring more money into the Belawan area. They're focusing on sanitation, clean water, drainage, and roads to tackle extreme poverty by 2024. These upgrades are bound to make the northern neighborhoods more appealing to homebuyers and investors.
There's also buzz about new commercial developments, like the Premium Office Tower in Podomoro City Deli Medan. This place will have it all—residential towers, hotels, and a mall. It's a sign that the local economy is on the up, and real estate developers are ramping up their marketing efforts.
All these factors are coming together to paint a bright picture for Medan's northern neighborhoods. With better connectivity and new developments, the area is set to become a real estate hotspot.
So, if you're thinking about buying property in Medan, keep an eye on the north. It's where the action is, and it might just be the perfect time to invest.
Sources: PwC, The Jakarta Post, Antara News
16) Medan’s luxury condo prices will rise as more foreign buyers enter the market
Foreign buyers are flocking to Medan's luxury condo market, pushing prices higher.
In 2023, Medan saw a boom in foreign direct investment, especially in real estate, thanks to its strategic location and growing economy. This influx is turning Medan into a bustling economic hub. The city is buzzing with new luxury condo developments, catching the eye of international investors. Medan's improved infrastructure and connectivity make it a hot spot for high-end property buyers.
The Indonesian government is rolling out the red carpet for foreign property ownership with tax breaks and easier licensing, creating a welcoming atmosphere for international investors. Medan's luxury condos are a bargain compared to other regional markets, which is a big draw for foreign buyers. The city's new airports and public transport systems are not just boosting property values but also making Medan more accessible to global investors.
Medan's strategic position and the surge in foreign investment are fueling positive economic growth indicators, attracting even more foreign buyers to its real estate market. The city's transformation is evident in its thriving luxury condo scene, where international interest is steadily rising. With these developments, Medan is becoming a prime destination for those looking to invest in upscale properties.
Sources: GAsian Times, ET Edge Insights
17) Luxury property prices in Medan will rise as high-net-worth individuals continue to invest in exclusive areas
Luxury properties in Medan are catching the eye of high-net-worth individuals, and this trend shows no signs of slowing down.
In 2023 and 2024, property prices in Medan surged, even as the national market lagged behind. This rise highlights a strong demand for homes in the city, fueled by foreign direct investment and Medan's strategic location. The city's appeal is not just local; it's becoming a hotspot for international buyers looking for premium real estate.
The number of ultra high net worth individuals (UHNWIs) in Indonesia is climbing. In 2023, there were about 1,479 UHNWIs, and this figure is expected to grow to nearly two thousand by 2028. This increase means more people are on the hunt for luxury properties in Medan, as they seek out top-tier living spaces that match their lifestyle.
Medan's economy is thriving, thanks to foreign direct investment and its proximity to countries like Malaysia, which boosts its role in international trade. Infrastructure improvements, like new airports and roads, are further enhancing property values, making Medan a magnet for investors. These developments are not just about convenience; they are transforming the city into a major player on the global stage.
For those in the know, Medan's exclusive neighborhoods are where the action is. High-net-worth individuals are driving up prices in these areas, making them some of the most sought-after spots in the country. The combination of economic growth and strategic location is creating a perfect storm for luxury real estate.
As Medan continues to evolve, it's clear that the city's luxury market will keep attracting affluent buyers. This ongoing interest is set to push property values even higher, solidifying Medan's status as a prime destination for luxury living.
Sources: Statista, PR Newswire, Confident Group
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18) Demand for retirement-friendly housing in Medan will grow as the population ages
The aging population in Medan is reshaping housing demands.
In recent years, Indonesia has seen a surge in its elderly population, with those aged 65 and above growing rapidly. This trend is expected to continue, with projections indicating a rise from 8.4 million in 2020 to 14.4 million by 2030. This demographic shift is largely due to increasing life expectancy, which the World Health Organization noted had risen to 72.1 years by 2019, up from 69.4 years in 2015.
As more people live longer, healthier lives, Medan is witnessing a boom in healthcare and assisted living facilities. This is part of a nationwide trend where both private and public healthcare providers are expanding their services to meet the needs of older adults. In Medan, this includes the development of senior-friendly housing options that focus on safety, cleanliness, and accessibility.
These housing options are not just about providing a roof over one's head; they are designed to enhance the quality of life for seniors. Features like easy-to-navigate layouts, emergency response systems, and community spaces for socializing are becoming standard. This shift is crucial as the elderly population grows, creating a higher demand for retirement-friendly housing.
For potential property buyers, this means an opportunity to invest in a market that is poised for growth. The demand for senior-friendly housing is expected to rise, making it a potentially lucrative investment. Understanding the needs of this demographic can give buyers an edge in the market.
In Medan, the focus is on creating environments where seniors can live independently yet have access to necessary support. This approach not only caters to the current needs but also anticipates future demands as the population continues to age. The city's commitment to developing such facilities highlights the importance of adapting to demographic changes.
Sources: CentraState Healthcare System, Senior-Friendly Tourism Destinations, emeis Senior Assisted-Living Facilities
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.