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What is happening in Medan’s real estate market? Are prices on the rise or decline? Is Medan still attracting foreign investors? How are local government policies and taxes shaping the real estate landscape in 2025?
These are the questions we hear every day from professionals, buyers, and sellers alike, from the heart of Medan to its surrounding areas. Perhaps you’re curious about these trends too.
We know this because we stay closely connected with local experts and individuals like you, exploring the Medan real estate market daily. That’s why we crafted this article: to offer clear answers, insightful analysis, and a comprehensive view of market trends and dynamics.
Our aim is straightforward: to make sure you feel informed and confident about the market without needing to search elsewhere. If you think we missed something or could improve, we’d love to hear your feedback. Feel free to message us with your thoughts, and we’ll strive to enhance this content for you.
1) Property values in flood-prone areas of Medan will decline as climate concerns increase
In Medan, property values in flood-prone areas are dropping as climate concerns grow.
Medan's East Coast, including the city itself, is facing a unique challenge. Sea levels here are rising faster than the global average, making the area more vulnerable to severe flooding. This increased risk is causing potential buyers to think twice before investing in properties that might be underwater, literally and financially.
Take the Setia Budi area, for instance. It's notorious for its frequent flooding due to poor drainage systems. These systems are not just outdated; they are overwhelmed, leading to blockages and high sedimentation. This makes the area less appealing to buyers, who are wary of the constant threat of water damage.
As if the flooding wasn't enough, insurance premiums for these properties are climbing. The CoreLogic Flood Risk Score shows that homes with higher flood risks face steeper insurance costs. This added expense is a deal-breaker for many potential buyers, further driving down property values.
Interestingly, this isn't just a local issue. In places like Miami, Florida, similar patterns are emerging. Increased flood risks there have also led to a drop in property values, showing that this is a broader trend linked to climate change.
For those considering buying property in Medan, it's crucial to weigh these factors. Flood risks and rising insurance costs are reshaping the real estate landscape, making some areas less desirable than they once were.
Sources: Sea Level Rise, Land Subsidence, and Flood Disaster Vulnerability Assessment: A Case Study in Medan City, Indonesia, Study Of Drainage Analysis As Flood Control In Setia Budi Area Medan City, The Impact of Flood Risk on Property Values
2) Property prices in central Medan will stabilize as the market matures
Central Medan's property prices are expected to stabilize as the market matures.
One big reason for this is the development of infrastructure, like the Trans Sumatra toll road, which is boosting connectivity. This makes the area more appealing and accessible, often leading to a more stable property market.
Government policies, such as the Omnibus Law, are also playing a role by simplifying property purchase qualifications and attracting foreign investors. This influx of investment helps create a balanced and stable market environment.
Real estate agencies have noticed a balanced supply and demand, with property sales rising in late 2023. This is largely due to increased sales of medium and large residences.
Historical data shows a slowdown in price increases, like the 0.45% year-over-year rise in apartment prices in Q4 2023. This suggests the market is reaching stability.
Experts predict that demand will rise modestly due to stimulus measures, further supporting the idea of market stabilization.
Sources: Mordor Intelligence, Global Property Guide, PwC
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.
3) Medan’s property prices will rise moderately as local buyer demand increases
Medan's residential property prices are on the rise due to increasing demand from local buyers.
With a steady population growth of 1.64% annually, more people are flocking to Medan, creating a higher demand for housing. This influx means that the city is bustling with new residents who need places to live, naturally pushing up property prices.
The local economy is also on an upswing, which often translates to higher household incomes. When people have more disposable income, they're more inclined to invest in homes, further fueling the demand. Government initiatives, like the VAT incentive program and relaxed loan-to-value ratios, have made it easier for people to purchase homes, adding to the buying frenzy.
In the last quarter of 2023, there was a 3.27% increase in residential property sales compared to the previous year. This uptick in transactions is a clear indicator that more people are buying homes, signaling a robust demand in the market.
Medan is becoming increasingly attractive due to its growing reputation as a desirable place to live. Infrastructure developments and vibrant economic activities are drawing potential homeowners to the city, making it a hotspot for property investment.
Sources: Global Property Guide, World Population Review, Macrotrends
4) Student influx in Medan will increase demand for rentals near universities
The influx of students to Medan is set to boost demand for rental properties near universities.
Medan's universities are bustling with activity, especially the State University of Medan, which hosts between 15,000 and 19,999 students. This large student body naturally needs places to live, creating a significant demand for rental properties. With 11 universities offering 144 study programs, the city is a hub for higher education, drawing in more students each year.
As these programs grow, they attract not just local students but also international ones, further increasing the need for housing. Students often prefer off-campus housing because it's more convenient and affordable. This preference, coupled with reports of housing shortages near campuses, highlights the dynamic nature of the student housing market.
With more students pursuing higher education, the need for suitable accommodation becomes increasingly vital. This often leads to housing shortages, which in turn boosts demand for rental properties. The student housing market in Medan is not just about numbers; it's about meeting the needs of a diverse student population.
As Medan continues to grow as an educational center, the demand for student-specific accommodation is expected to rise. This trend is not just a local phenomenon; it's part of a larger pattern seen in university towns worldwide. The city's ability to adapt to this demand will be crucial in shaping its future as a thriving educational hub.
Sources: Free Apply, Booking Ninjas, 4icu.org
5) High-rise apartments in Medan will become popular as city center land becomes scarce
Medan's city center is running out of space, making high-rise apartments the new go-to for homebuyers.
With land becoming scarce, property prices in the city center have shot up to around $1,900 per square meter, while it's about $800 outside. This price hike is pushing both developers and residents to look upwards, literally.
Central Medan is feeling the squeeze with limited land for new projects, so the city is turning to high-rise buildings to make the most of what’s left. Urban planners are on board, tweaking policies to support this vertical growth and cater to the increasing population.
High-rise projects are popping up all over Medan, with big names like Manhattan Tower 1 and 2, Grand Jati Junction Office Tower, and Podomoro City Deli Office Tower leading the charge. These developments are reshaping the skyline, a clear sign of the city's pivot to vertical living.
For those eyeing property in Medan, these high-rises offer a modern living solution in a city where land is becoming a luxury. The trend is not just about space; it's about adapting to the city's evolving landscape.
As Medan continues to grow, high-rise apartments are set to become even more popular, offering a practical answer to the city's land crunch.
Sources: Indonesia Real Estate, The Skyscraper Center
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6) Foreign buyers will increasingly target Medan’s real estate market due to favorable exchange rates
Foreign buyers are increasingly eyeing Medan's real estate market due to favorable exchange rates.
In recent years, the Indonesian Rupiah (IDR) has fluctuated in a way that benefits foreign currencies, especially the US Dollar (USD). For instance, on January 9, 2025, the exchange rate was 1 IDR = 0.00006 USD, which is slightly better for foreign investors than previous rates. This trend is making Medan an attractive spot for those looking to invest in property.
Experts believe these favorable exchange rates will persist, creating a golden opportunity for foreign investors. The Indonesian government is also rolling out policies like the Golden Visa and Second Home Visa, which make it easier for foreigners to buy property or secure long-term residency. These initiatives are part of a broader strategy to draw more foreign direct investment into the real estate sector.
Medan stands out because its property prices are more affordable compared to other big Indonesian cities like Jakarta or Bandung. This affordability, combined with the favorable exchange rates, makes Medan a hot spot for foreign buyers. Local real estate agents are noticing a surge in inquiries from abroad, signaling a growing interest in the market.
For those considering a move, Medan offers a unique blend of affordability and opportunity. The city is not just a place to buy property; it's a chance to invest in a market that's ripe for growth. With the right timing and strategy, foreign investors can find lucrative opportunities here.
As the exchange rates continue to favor foreign currencies, Medan's real estate market is poised to become even more appealing. The combination of government incentives and competitive pricing is creating a perfect storm for investment.
Sources: Exchange Rates, Statista, Indonesia Real Estate
7) Foreign investment in Medan’s residential properties will grow as the city gains international recognition
Medan is becoming a hotspot for international investors thanks to better flight connections and improved transport links.
With its strategic location near Malaysia, Medan is now easier to reach, especially with new public transport systems like the Bus Rapid Transit. This makes it a breeze for investors to explore opportunities in the city.
The Indonesian government is rolling out the red carpet for foreign investors by simplifying investment procedures and offering tax breaks. This is making Medan's real estate market more attractive and accessible to international buyers.
Medan is catching the world's eye with its cultural and economic growth. The buzz around its diverse economy and rich heritage is likely to draw more foreign investment into the city.
Big infrastructure projects, including new airports and roads, are putting Medan on the map. These developments are boosting property values and making the city more appealing to international investors.
As Medan gains international recognition, expect a rise in foreign investment in its residential properties. The city's growth and improved connectivity are key factors driving this trend.
Sources: EU Reporter, BKPM, Indonesia Real Estate
8) New tax incentives for first-time buyers will boost Medan’s residential market
New tax incentives for first-time homebuyers in Medan are set to shake up the residential market.
Historically, tax breaks have been a game-changer for property sales. Take the U.S. in 2009, where the Worker, Homeownership, and Business Assistance Act led to a noticeable spike in home sales. This shows how tax incentives can drive market activity by making homeownership more appealing.
Surveys reveal that incentives like the First-Time Homebuyer Act of 2024, which offered up to $15,000 in tax credits, sparked interest among new buyers. This trend suggests that similar incentives in Medan could boost the housing market. Media often highlights how these tax breaks ease the financial load, encouraging more people to dive into homeownership.
Experts predict that these new tax incentives will ramp up activity in Medan's residential market. Programs like Fannie Mae's HomeReady Mortgage have successfully increased homeownership in other areas and could be a blueprint for Medan. Financial institutions are already seeing a rise in home loan applications from first-time buyers, indicating that tax incentives are effective market stimulators.
In Medan, the buzz around these incentives is palpable. Real estate agents are gearing up for a surge in interest, and potential buyers are crunching numbers to see how they can benefit. The local market is poised for a shift, with more first-time buyers ready to take the plunge into homeownership.
As these incentives roll out, the landscape of Medan's housing market is expected to change. With financial barriers lowered, more residents are likely to consider buying rather than renting, leading to a dynamic shift in the market.
Sources: IRS, NAR, Fannie Mae, Homebuyer.com
We have made this infographic to give you a quick and clear snapshot of the property market in Indonesia. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) Medan’s northern neighborhoods will attract more interest with new infrastructure projects enhancing connectivity
The northern neighborhoods of Medan are becoming a hot spot for property buyers due to new infrastructure projects improving connectivity.
Governor Hassanudin has been instrumental in enhancing the links between North Sumatra and its neighbors, Riau and Aceh, with new toll roads like the Medan-Binjai-Stabat segment extending all the way to Langsa and Aceh. These roads are not just about convenience; they are transforming Medan into a vital hub for trade and travel.
Another exciting development is the Rantau Parapat toll road's connection to the Riau toll road, which is set to boost the region's connectivity even further. This makes the east coast a key gateway for goods and passengers, and it's no surprise that property prices in Medan's northern neighborhoods are on the rise. The strategic location and economic growth are drawing in foreign direct investment, and the improved public transport systems, like the Bus Rapid Transit (BRT) in Mebidangro, are making life easier for residents.
In the first half of 2023, North Sumatra saw a 15.75% growth in investments compared to the previous year, signaling a surge in real estate transactions and interest in Medan. The buzz around improved connectivity in northern Medan is catching the eye of investors and homebuyers alike, with media coverage amplifying the area's appeal.
Real estate agencies are optimistic, predicting growth in the northern neighborhoods due to their strategic location and ongoing infrastructure improvements. This optimism is not just talk; it's backed by the tangible changes happening on the ground.
With all these developments, Medan's northern neighborhoods are becoming increasingly attractive for those looking to invest in property, offering a blend of strategic location and enhanced connectivity that is hard to resist.
Sources: PwC, InCorp Asia
10) International companies in Medan will draw foreign buyers seeking residential investments
International companies in Medan are drawing foreign buyers interested in residential investments.
In 2023, North Sumatra saw a surge in investments, totaling IDR 22.206 trillion, which is a 15.75% increase from 2022. This uptick highlights growing interest from both local and international investors.
Medan alone attracted IDR 3.87 trillion in foreign direct investment in the first half of 2023, underscoring the strong presence of international companies. The city's population reached 2,474,166 by mid-2023, with a notable expatriate community driving demand for residential properties.
Key infrastructure projects like the Kuala Namu International Airport and Belawan Port are boosting Medan's connectivity, making it more appealing to international businesses. These developments are crucial in attracting foreign investment and, in turn, foreign buyers for residential properties.
The local government is actively supporting infrastructure and public facility improvements, creating a business-friendly environment that encourages foreign investment. This support is a significant draw for international companies and potential residential buyers.
With these factors in play, Medan is becoming a hotspot for foreign residential investment, driven by its strategic location and robust infrastructure. The presence of international companies is a key element in this trend.
Sources: InCorp Asia, OCS USU
11) Medan's luxury property prices will stay stable as the high-end market reaches saturation
The luxury property market in Medan is seeing a surge in available properties.
With more options on the table, buyers are in a good spot as developers compete fiercely to catch their attention, keeping prices steady. This trend is a clear sign that the market is getting saturated.
Over the past few years, sales in the high-end segment have slowed down. When the market is packed with similar luxury homes, demand naturally dips, which helps keep prices from rising.
Interestingly, many buyers are now leaning towards mid-range properties instead of luxury ones. This shift in preference means less demand for high-end homes, which again plays a role in stabilizing prices.
For those considering a purchase, this could be a great time to explore options, as the market dynamics are favoring buyers with more choices and stable pricing.
So, if you're eyeing a luxury property in Medan, know that the current market conditions are working in your favor.
Sources: Indonesia Real Estate, CBS News
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12) Medan's property prices will slightly decline in areas with an oversupply of new developments
In Medan, the real estate market is facing some challenges, especially in areas with an oversupply of new developments.
One big issue is the high vacancy rates in these new buildings. When there are too many properties and not enough buyers or tenants, it leads to empty buildings, which can drive prices down. Imagine walking through a neighborhood with lots of shiny new apartments, but most of them are dark at night because no one lives there.
Another problem is the growing concern about unsold inventory. Developers sometimes build more properties than the market demands, and then they struggle to sell them. This oversupply often results in developers offering discounts and promotions to attract buyers, which can further push prices down. It's like a store with too much stock; they have to put things on sale to clear the shelves.
Rental yields are also declining in these oversupplied neighborhoods. With too many rental properties available, landlords may have to lower their rental rates to attract tenants. This reduces the overall return on investment for property owners, making these areas less attractive to investors and potentially leading to lower property prices. It's a bit like a crowded market where sellers have to drop prices to get any attention.
For those considering buying property in Medan, it's crucial to be aware of these dynamics. While some areas might offer tempting deals, the long-term value could be affected by these market conditions. It's like buying a car that seems cheap but might cost more in repairs down the road.
Understanding these factors can help potential buyers make informed decisions. It's not just about the price tag today but also about what the property will be worth in the future. Think of it as investing in a stock; you want to know if it will grow or shrink over time.
Sources: AJHSSR, Rently, Nation Thailand
13) Property values in southern Medan will grow slowly as development shifts focus to the city center
Medan's development is heavily focused on the city center.
Big projects like the renovation of Merdeka Square and the revamp of Kesawan Old Town show this trend. These efforts clearly aim to boost the appeal of central areas.
Key developments such as Centre Point Medan and Podomoro City Deli Medan are also in the heart of the city. This means both homes and businesses are popping up more in these central spots, not in Southern Medan.
Plans to improve connectivity, like building an LRT system and expanding the airport, are also centered around the city center. This focus could drive up property demand and values there.
Even without specific data on Southern Medan, the overall trend in Indonesia shows that urbanization favors city centers. This suggests that growth will likely be stronger in Medan's core.
Sources: Future Southeast Asia, Mordor Intelligence
14) Property prices on Medan's outskirts will gradually rise as urban sprawl progresses
Medan's population has been on the rise, reaching around 2.5 million by mid-2023.
This surge in residents means there's a growing need for housing, especially in the outskirts where land is more available and affordable. As more people look for homes, these areas are becoming hotspots for potential buyers.
Infrastructure projects like the Medan-Kuala Namu-Tebing-Tinggi toll road have made the outskirts more accessible. Improved connectivity often boosts an area's appeal, attracting both residents and businesses, which can lead to a rise in property prices.
The government is also pushing for suburban development, with plans to build transportation facilities supporting nearby industrial estates. These initiatives are set to make the outskirts even more attractive, likely driving up property values as development progresses.
As urban sprawl continues, the outskirts of Medan are expected to see a gradual increase in property prices. This trend is fueled by both infrastructure improvements and government policies aimed at suburban growth.
For those considering buying property, the outskirts of Medan offer a promising opportunity. With ongoing development and increased accessibility, these areas are poised for growth, making them an appealing choice for potential homeowners.
Sources: Wikipedia, Oxford Business Group, CoreLogic
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.
15) Medan's rental market will decline in areas with outdated infrastructure and few amenities
The rental market in Medan is changing, with tenant preferences shifting towards modern amenities.
People are now looking for homes with good ventilation, natural light, and energy-efficient appliances. This means that areas without these features are struggling to attract renters. Medan is seeing new infrastructure projects like steam-powered electric plants and new rail tracks, which are drawing tenants to more developed neighborhoods.
Real estate experts note that high-value developments in well-connected areas are driving Medan's growth. This trend suggests that neighborhoods with aging infrastructure will likely see a drop in property values and rental interest. The population is moving towards modern and well-maintained areas, leaving older areas behind.
As a potential property buyer, it's crucial to consider these shifts. Investing in areas with modern amenities and good infrastructure could be more profitable. The demand is clearly leaning towards places that offer a better quality of life.
Keep an eye on these trends if you're thinking about buying property in Medan. The market is favoring areas that are keeping up with tenant demands for modern living conditions.
Sources: Oxford Business Group, Realtor.com, The Rent Shop
16) Rental yields in Medan will increase in areas with better public transportation options
Property values tend to rise in areas with new or improved public transportation.
In cities like Boston and Chicago, homes near transit facilities have seen a 41.6% better increase in value compared to those further away. This trend suggests that if Medan enhances its public transport, property values there could also rise significantly.
Take London, for instance. Since the introduction of Crossrail in 2008, property prices in nearby areas have jumped by over 30%. This kind of boost in property value often leads to higher rental yields, making it a lucrative opportunity for investors.
People generally prefer living close to public transport, which can drive up demand for rentals in these areas. This demand typically results in higher rental yields for property owners. While we don't have specific data for Medan, this pattern is common in many cities.
Investors should keep an eye on neighborhoods in Medan that are set to benefit from improved public transport. As these areas become more accessible, rental yields are likely to rise, making them attractive for property buyers.
In summary, the link between public transport and property value is clear. As Medan develops its transit options, neighborhoods with better connectivity could see a surge in both property values and rental yields.
Source: ULI Research Roundup
17) Affordable housing demand in Medan will steadily raise property prices in lower-income neighborhoods
The demand for affordable housing in Medan is on the rise, pushing property prices up in lower-income neighborhoods.
Medan's population has been booming, with over 2.4 million residents by 2024, which naturally increases the need for housing, especially in budget-friendly areas. This growth is fueled by people flocking to the city for job opportunities, adding to the housing crunch.
Government efforts to revamp areas like the Belawan slum are also making a difference. These initiatives not only improve living conditions but also boost property values as neighborhoods become more appealing. As these areas get a facelift, they attract more interest from potential buyers.
Central Medan is running out of land, so people are looking to the outskirts where lower-income neighborhoods offer more space. This shift is causing property prices to climb as developers and homebuyers turn their attention to these areas.
Rising rents in the city center are nudging residents towards home ownership in cheaper neighborhoods. This trend is further driving up demand and prices in these more affordable areas, making them hot spots for potential buyers.
With all these factors at play, it's clear that affordable neighborhoods are becoming increasingly valuable in Medan's real estate market.
Sources: World Population Review, Antara News
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18) Neighborhoods with new digital infrastructure will attract tech-savvy buyers
Neighborhoods with new digital infrastructure are becoming hot spots for tech-savvy buyers.
In Indonesia, the smart homes market is on fire, with revenue expected to hit $305 million USD by 2025. This boom, growing at an annual rate of 22.7%, suggests that properties in these tech-friendly areas are likely to increase in value. As smart homes become the norm, buyers are on the lookout for neighborhoods that can support this cutting-edge technology.
The appetite for smart technology is growing, with the number of active households in Indonesia's smart homes market projected to reach 12.6 million by 2025. This surge in interest means homes with smart features are becoming more desirable, especially in neighborhoods that are digitally connected.
People now prioritize high-speed internet access, particularly in urban areas. This demand for reliable connectivity is driving up interest in homes located in areas with strong internet infrastructure, making these neighborhoods more appealing to tech-savvy buyers.
As more buyers seek out these digitally equipped areas, the real estate market is responding by highlighting properties that offer the latest in smart home technology and connectivity. This shift is reshaping how people choose where to live, with a clear preference for neighborhoods that can keep up with technological advancements.
For those looking to invest in property, understanding these trends can be crucial. Neighborhoods with access to the new digital infrastructure are not just a trend; they are becoming the future of desirable living spaces for tech enthusiasts.
Sources: Trade.gov, Tech Collective SEA, Kadence
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.