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Indonesia's property market presents a mixed picture as of September 2025, with Bali leading strong growth while major cities like Jakarta remain stagnant.
National property prices have grown modestly at 1.4% year-on-year, but regional differences are substantial—Bali has seen 51% price increases since 2022, while Jakarta's CBD remains flat. Foreign buyers face new opportunities with relaxed ownership rules, but currency risks and regulatory changes require careful consideration before making investment decisions.
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.
Indonesia's property market shows strong regional variations, with Bali experiencing 10-15% annual growth while Jakarta stagnates at flat to slight increases.
Foreign buyers can now access strata-title apartments under the Omnibus Law, with cash purchases offering the best negotiation leverage and fastest transactions.
| Key Market Indicators | Current Status (Sep 2025) | Outlook |
|---|---|---|
| National Price Growth | 1.4% YoY (Q4 2024) | 1-1.5% projected for 2025 |
| Bali Market | 10-15% annual growth | Continued strong performance |
| Jakarta CBD | Flat to slight increases | Modest/stagnant outlook |
| Rental Yields (South Jakarta) | ~8% gross | Above historical 6-7% |
| Entry Point (Emerging Cities) | $65k-$195k | Best value opportunities |
| Foreign Ownership | Strata-title apartments allowed | Regulatory tightening possible |
Fact-checked and reviewed by our local expert
Daniel Rouquette 🇫🇷
CEO & Co-Founder at Villa Finder
What's the current trend in property prices across Indonesia, and how has it changed over the past 12 to 24 months?
Indonesian property prices have experienced modest growth at the national level, with year-on-year increases of 1.4% in Q4 2024, significantly lower than historical averages.
The national housing index shows growth ranging between 0.9% and 1.6% over the past two years, representing a substantial slowdown from previous periods of rapid price escalation. This modest performance reflects sluggish demand in major urban centers, particularly Jakarta, where the market has largely stagnated.
Regional variations paint a dramatically different picture, with Bali emerging as the standout performer with price increases of 51% since 2022 and annual growth rates of 10-15% for land and villa properties. Tourism-driven areas and emerging secondary cities have bucked the national trend, showing robust demand and appreciation.
The contrast between markets is stark—while Jakarta's CBD faces flat to minimal price increases, Bali's premium areas like Berawa Beach, Nusa Dua, and Ubud continue to attract strong international demand. As of September 2025, this divergence between tourist destinations and traditional urban centers represents the defining characteristic of Indonesia's current property landscape.
It's something we develop in our Indonesia property pack.
How do forecasts look for property values in the short term, medium term, and long term?
Short-term forecasts for 2025 project continued modest national growth of 1-1.5% year-on-year, with Bali maintaining its exceptional performance trajectory of 10%+ annual increases.
Jakarta's property market is expected to remain flat throughout 2025, with Q2 2025 projections showing the national growth rate potentially slowing to 0.9%. The capital's oversupply issues and reduced demand from both domestic and international buyers continue to weigh on price appreciation in the city center and surrounding areas.
Medium-term projections for 2026-2027 indicate the national property price index will reach 114.75 in 2026 and 116.24 in 2027, suggesting continued slow but steady appreciation across the country. Secondary cities with strong infrastructure development and lifestyle migration trends are expected to outperform this national average.
Long-term outlook favors investment-grade tourist destinations and well-positioned secondary cities, driven by infrastructure improvements, changing work patterns, and lifestyle preferences. Bali's tourism recovery and digital nomad influx support sustained growth potential, while emerging cities like Batam, Makassar, and Medan's Setiabudi area offer compelling growth prospects due to economic diversification and urban development initiatives.
The divergence between markets is expected to continue, with tourist and lifestyle destinations maintaining premium growth rates while traditional urban centers adjust to new demand patterns.
Which areas in Indonesia are seeing the strongest growth, and which are stagnating or declining?
Bali dominates the strongest growth category with specific areas showing exceptional performance across different property segments.
| Growth Category | Areas | Performance Metrics |
|---|---|---|
| Strongest Growth | Bali (Berawa Beach, Nusa Dua, Ubud) | 10-15% annual, 51% since 2022 |
| Emerging Strong | Medan Setiabudi, Batam, Makassar | 35% demand increase (Medan) |
| Tourism-Driven Growth | Secondary tourism zones | Above-average appreciation |
| Stagnating | Jakarta CBD, parts of Surabaya | Flat to minimal increases |
| Declining Segments | Large residential units in major cities | Facing headwinds, oversupply |
The strongest performers benefit from tourism recovery, digital nomad influx, and lifestyle migration trends. Bali's prime areas command premium prices with €3,000-€3,600 per sqm in Berawa and €2,700 per sqm in Ubud, reflecting sustained international demand.
Emerging secondary cities like Medan's Setiabudi district have experienced 35% increases in demand, with median unit prices ranging from $65,000 to $195,000, offering significant value compared to established markets. These areas benefit from infrastructure development and economic diversification initiatives.
Stagnating markets primarily include Jakarta's CBD and certain segments of Surabaya, where oversupply of medium to large residential units has created downward pressure on prices. Jakarta's price per square meter remains around $3,495 (IDR 52.89M), showing minimal movement despite the capital's economic importance.
How do property prices compare between popular areas like Bali, Jakarta, and emerging secondary cities?
Price differentials between Indonesia's major property markets reveal significant opportunities for different buyer profiles and investment strategies.
Bali commands premium pricing with average apartment prices ranging from €3,000-€3,600 per sqm in prime areas like Berawa Beach, while Ubud averages €2,700 per sqm. Entry-level apartments in Bali start at $60,000-$70,000, though most quality offerings begin at $100,000+. The island's pricing reflects its international appeal and limited developable land in prime locations.
Jakarta's CBD maintains pricing around IDR 52.89M (~$3,495) per sqm for apartments, representing stability rather than growth. The capital's apartment occupancy rate of 87.9% in Q1 2025 indicates steady demand but limited price appreciation potential due to substantial supply in the pipeline.
Emerging secondary cities offer compelling value propositions, with Medan, Batam, and Makassar providing entry-level properties at $65,000-$195,000 for solid homes. Surabaya apartments average IDR 20M (~$1,322) per sqm, significantly below Jakarta levels while offering similar urban amenities.
The price gap between Bali and emerging cities can exceed 200%, creating clear differentiation between lifestyle/tourism-focused investments and value-oriented opportunities in developing urban centers. This spread provides options for buyers across different budget ranges and investment objectives.
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What types of properties—apartments, villas, commercial units, or land—are performing best right now?
Bali villas and land parcels currently deliver the strongest performance, driven by tourism recovery and the growing digital nomad community.
Villa properties in Bali benefit from multiple demand sources including short-term vacation rentals, long-term expat residents, and investment buyers seeking appreciation. Land purchases in prime Bali locations have shown exceptional returns, particularly in areas with development potential or proximity to tourist attractions. The scarcity of well-located land combined with ongoing development restrictions supports continued value appreciation.
Jakarta apartments maintain stable performance with an 87.9% take-up rate in Q1 2025, indicating consistent demand despite limited price growth. The stability makes apartments attractive for income-focused investors, though capital appreciation remains modest. New developments with VAT incentives up to IDR 5B have provided additional buyer interest, though these incentives are phasing out by end-2024.
Commercial units show strong performance in retail upturn districts, particularly in secondary cities like Medan and Batam where economic diversification drives demand for retail and office space. These markets benefit from lower entry costs and growing local economies.
It's something we develop in our Indonesia property pack.
What are the current rental yields by area and property type, and how do they compare to historical averages?
Current rental yields show significant improvement across multiple markets, with South Jakarta leading at approximately 8% gross yields for apartment investments.
South Jakarta's rental market benefits from its position as a business and expat residential hub, generating yields of around 8% gross compared to historical averages of 6-7%. The area's established infrastructure, international schools, and business districts support consistent rental demand and premium pricing.
Bali villa rentals deliver yields ranging from 7-12% depending on location and property quality, compared to historical averages of 6-10%. Prime beachfront villas in areas like Seminyak and Canggu command the highest yields through short-term vacation rental platforms, while long-term residential rentals provide more stable but lower returns.
Secondary cities including Batam and Makassar show rising furnished rental yields of approximately 6-8%, up from historical bases of 4-5%. These markets benefit from economic growth, infrastructure development, and increasing urban mobility as professionals seek alternatives to major city centers.
The yield improvements reflect both rental rate increases and relatively stable purchase prices in many markets, creating favorable conditions for income-focused investors. However, yields require active management, particularly for short-term rental properties in tourist destinations.
What government regulations, ownership rules, or foreign buyer restrictions could impact a purchase now or in the future?
Recent regulatory changes have created new opportunities for foreign buyers while introducing potential future restrictions that require careful consideration.
1. **Omnibus Law Benefits**: The Omnibus Law now allows foreigners to purchase strata-title apartments, providing direct ownership rights previously unavailable. This represents the most significant regulatory improvement for foreign property buyers in Indonesia's recent history.2. **Right to Build Access**: Foreign buyers can now access Hak Guna Bangunan (Right to Build) titles in select developments, offering enhanced property rights and longer-term security for villa and land purchases.3. **VAT Incentive Phase-Out**: Government VAT incentives on new units up to IDR 5B are ending by December 2024, potentially increasing purchase costs for new developments. Early action may capture remaining incentive benefits.4. **Loan-to-Value Changes**: The extension of LTV relaxation has ended, though some forbearance continues for first-home buyers. This tightening may reduce financing options and increase cash requirements.5. **Enforcement Tightening**: Government agencies are strengthening permitting enforcement and title upgrade procedures, which could affect foreign access and increase transaction complexity in the future.These changes create a window of opportunity under current favorable conditions while signaling potential tightening of foreign buyer access. The regulatory environment favors immediate action over delayed decision-making.
What's the availability of financing for foreigners, and how do mortgage rates compare with cash purchase opportunities?
Foreign financing remains limited and restrictive, making cash purchases the preferred and often necessary approach for international buyers in Indonesia.
Indonesian banks and fintech companies offer selective financing to foreigners, but requirements are stringent including the need for a Second-Home Visa with a minimum $128,000 bank deposit. Mortgage rates typically range from 8-10% for qualifying residents, with significantly higher barriers and rates for non-resident foreigners. The complexity and uncertainty of foreign financing often make it impractical for most international buyers.
Cash purchases provide substantial advantages including faster transaction completion, stronger negotiation leverage, and access to new launch discounts. Developers often offer cash buyer incentives including price reductions, upgraded specifications, or favorable payment terms. The ability to move quickly with cash also provides access to the best inventory and prime locations.
Foreign buyers can access international financing through their home country banks using Indonesian property as collateral, though this approach requires coordination between jurisdictions and may involve currency exchange risks. Some international private banks offer property financing for high-net-worth clients investing in Indonesian real estate.
The financing landscape strongly favors cash-ready buyers, with financing serving primarily as a last resort rather than a preferred strategy for foreign property acquisition in Indonesia.
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.
What budget ranges offer the best value right now, and where are the entry points for different types of buyers?
Current market conditions create distinct value opportunities across different budget ranges, with emerging secondary cities offering the most compelling entry points.
The $65,000-$195,000 range in emerging cities like Medan, Batam, and Makassar represents exceptional value for solid entry-level homes with growth potential. These markets offer complete properties rather than just apartments, including landed houses with outdoor space and parking. Medan's Setiabudi area exemplifies this opportunity with median unit prices of Rp 1-3B ($65,000-$195,000) and 35% demand growth.
Bali entry points begin around $60,000-$70,000 for small apartments, though most quality offerings start at $100,000+. The island's premium positioning means higher entry costs but also superior appreciation potential and rental yield opportunities. Buyers seeking Bali exposure should prepare budgets of $150,000+ for properties with strong investment characteristics.
Jakarta's mid-range apartments start around $3,495 per sqm (IDR 52.89M), requiring budgets of $200,000+ for quality units in desirable areas. While offering urban amenities and established infrastructure, Jakarta properties provide stability rather than growth, making them suitable for income-focused rather than appreciation-focused strategies.
The best value currently lies in emerging secondary cities where infrastructure development, economic diversification, and lifestyle migration create growth catalysts at accessible price points. These markets offer the optimal combination of affordability and upside potential for different buyer profiles.
How liquid is the property market—how easy is it to resell quickly, and at what expected discount or premium?
Market liquidity varies significantly by location and property type, with Bali and VAT-incentivized new developments offering the highest liquidity levels.
Bali properties, particularly villas and apartments in prime tourist areas, demonstrate strong liquidity due to consistent international buyer interest. Well-located properties in areas like Seminyak, Canggu, and Ubud typically attract multiple buyer inquiries, with some prime locations potentially commanding resale premiums of 5-10% for exceptional properties. The island's limited supply of prime real estate supports relatively quick absorption of quality listings.
Secondary cities like Batam, Makassar, and Medan show faster transaction cycles than Jakarta, with typical holding periods shorter for motivated sellers. These emerging markets benefit from growing local demand and infrastructure development, creating more active buyer pools than stagnant urban centers.
Jakarta CBD properties face the most challenging liquidity conditions, with longer marketing periods required to achieve sale completion. The capital's oversupply situation and reduced buyer activity mean sellers should expect 3-8% discounts for urgent liquidation, with well-located properties potentially achieving closer to market value with patient marketing.
New-build units with remaining VAT incentives demonstrate enhanced liquidity as buyers seek to capture these limited-time benefits before year-end expiration. Overall, urgent liquidation typically requires 3-8% discounts across most markets, while prime tourist zones may offer resale premiums for exceptional properties.
What risks should buyers consider, including currency fluctuations, legal risks, or oversupply in certain areas?
Indonesian property investment involves several key risk categories that require careful evaluation and mitigation strategies.
1. **Currency Risk**: Rupiah volatility significantly impacts returns for foreign owners, with exchange rate fluctuations potentially offsetting property appreciation. The IDR's historical volatility requires hedging strategies or acceptance of currency exposure as part of total returns.2. **Legal and Regulatory Risks**: Title conversion issues, slow permitting processes, and evolving foreign ownership regulations create transaction complexity. Recent regulatory changes, while generally favorable, signal ongoing policy evolution that could affect future ownership rights.3. **Oversupply Risks**: Large and medium apartments in urban cores face oversupply conditions, particularly in Jakarta where new project launches exceed demand absorption. This creates downward pressure on both prices and rental rates in affected segments.4. **Market Concentration**: Heavy reliance on tourism in markets like Bali creates vulnerability to travel disruptions, economic downturns, or policy changes affecting international visitors.5. **Infrastructure and Development**: Emerging secondary cities, while offering growth potential, depend on infrastructure development and economic diversification that may proceed slower than anticipated.Risk mitigation strategies include thorough due diligence on legal matters, currency hedging for large investments, diversification across property types and locations, and working with experienced local professionals who understand regulatory compliance requirements.
If you want to buy now, how should you position yourself—what area, what property type, and what budget makes the most sense depending on whether your goal is living, renting out, or reselling?
Strategic positioning for Indonesian property purchases requires alignment between investment objectives, budget levels, and market opportunities available as of September 2025.
**For Living/Lifestyle Buyers:**Consider secondary cities like Batam, Makassar, and Medan's Setiabudi area for optimal value, amenities, and growth potential. These locations offer complete lifestyle packages at $65,000-$195,000 budgets with strong infrastructure and growth prospects. Bali remains attractive for lifestyle buyers but requires higher budgets of $150,000+ and acceptance of premium pricing and international competition.
**For Rental Income Focus:**Bali villas provide the highest rental yields of 7-12%, particularly in short-term vacation rental markets. South Jakarta apartments offer stable 8% gross yields with established rental markets and consistent demand. Furnished rentals in secondary cities provide emerging opportunities with yields of 6-8% and lower entry costs.
**For Resale/Appreciation Strategy:**Land or villa purchases in Bali offer the highest appreciation potential, benefiting from scarcity, tourism growth, and international demand. Renovated homes in fast-growing secondary cities provide strong upside potential at accessible entry points. Avoid Jakarta CBD properties for appreciation-focused strategies due to oversupply and stagnant conditions.
Foreign buyers should prioritize cash purchases for maximum negotiation leverage and transaction speed. Focus on markets with strong fundamentals rather than chasing short-term incentives, and ensure comprehensive legal due diligence on all title and regulatory matters.
It's something we develop in our Indonesia property pack.
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.
Indonesia's property market in September 2025 presents a tale of two markets—exceptional growth in Bali and emerging secondary cities contrasted with stagnation in traditional urban centers like Jakarta.
For foreign buyers, the current environment favors cash purchases in high-growth tourism destinations or value-oriented secondary cities, with the regulatory window of opportunity under the Omnibus Law creating favorable conditions for immediate action over delayed decision-making.
Sources
- Trading Economics - Indonesia Housing Index
- CEIC Data - Indonesia House Prices Growth
- BambooRoutes - Indonesia Price Forecasts
- Global Property Guide - Indonesia Price History
- Centrarium - Indonesia Property Prices Analysis
- Trading Economics - Indonesia House Price Index YoY
- Mordor Intelligence - Indonesia Residential Real Estate Market
- BambooRoutes - Indonesia Best Areas Analysis