Should you buy property in Medan now?

Authored by the expert who managed and guided the team behind the Indonesia Property Pack

Everything you need to know before buying real estate is included in our Indonesia Property Pack

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Medan. If you'd like to learn more about us, you can check our presentation page.

What's the current average price per square meter in Medan, broken down by property type and area?

As of September 2025, Medan's property market shows significant price variations across different property types and locations.

City center condominiums command the highest prices at approximately $1,900 per square meter, reflecting their premium locations and modern amenities. Mid to high-end apartments across the city average $1,653 per square meter, representing a substantial premium over other property types.

Standard residential houses are priced at $598 per square meter, making them the most affordable option for buyers seeking landed property. Suburban condominiums offer a budget-friendly alternative at around $800 per square meter, while townhouses sit in the middle at $476 per square meter.

Commercial properties average $561 per square meter, making them competitive with residential land options. Suburban land parcels are priced at $622 per square meter, offering opportunities for future development or long-term appreciation.

It's something we develop in our Indonesia property pack.

How have property prices in Medan changed over the past 12 months, and what's the trend forecast for the next 1–3 years?

Medan's residential property market has experienced explosive growth over the past year, with standard houses recording the highest appreciation at 67.8% year-over-year.

Apartments have shown similarly strong performance with 47.7% annual growth, particularly concentrated in luxury and high-rise units in central districts like Medan Baru. Commercial properties have demonstrated more moderate but steady growth at 13.8%, while suburban land has appreciated 6% annually.

The forecast for 2025-2030 indicates a normalization of growth rates, with standard residential properties expected to appreciate 1-3% annually. However, infrastructure-linked neighborhoods could see gains of 5-7% or higher, driven by ongoing transport improvements and development projects.

Long-term projections through 2035 suggest cumulative gains of 30-50% across the market, with premium, well-connected districts likely to outperform this average. The rapid price increases of 2024-2025 are expected to moderate as supply pipelines expand to meet demand.

What are the rental yields right now across different neighborhoods and property types?

How do vacancy rates compare between central areas, suburban areas, and new developments?

Central Medan maintains relatively low vacancy rates due to strong demand from professionals and expatriates, with new high-rise developments being absorbed quickly by the market.

The city center benefits from proximity to business districts, international schools, and healthcare facilities, creating consistent rental demand. However, older or poorly maintained buildings in central areas experience higher vacancy rates compared to modern developments.

Suburban areas show higher vacancy rates overall, particularly in locations lacking transport upgrades or integrated retail and amenity developments. Properties in suburban areas without BRT access or major road connections struggle more with tenant attraction and retention.

New developments demonstrate strong absorption rates when located in well-connected areas with good infrastructure. Projects near new toll roads, BRT routes, or planned commercial centers typically achieve faster occupancy rates than those in isolated locations.

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What is the expected population and economic growth in Medan over the next 5–10 years, and how could that impact housing demand?

Metro Medan's population has reached nearly 4.8 million as of 2025, with consistent annual growth of approximately 1.1%, indicating sustained demand for housing across all market segments.

The city's economic performance significantly outpaces national averages, with GDP growth of 6.4% driving job creation and income growth. This economic expansion attracts both domestic migration and international business investment, creating upward pressure on housing demand.

Infrastructure and regional logistics projects continue to foster inward migration, particularly attracting skilled professionals and middle-class families seeking better opportunities. The government's continued investment in transport connectivity and urban development supports long-term population growth projections.

Housing demand is expected to remain strong through the 2030s, with particular pressure on well-connected neighborhoods and modern developments. The growing middle class and improving economic conditions support both ownership and rental market expansion.

Which neighborhoods are seeing the fastest development in terms of infrastructure, malls, schools, and transport?

Northern Medan leads the city's development boom, benefiting from new toll roads and major public transport expansions including BRT routes toward Binjai and improved Riau connections.

1. Northern Medan districts with new toll road access and BRT expansion projects
2. Medan Baru featuring rapid new project launches and office-retail clusters
3. Kampung Baru with proximity to education and medical hubs
4. Fringe areas along new transport routes experiencing mall and school investments
5. Districts connected to planned commercial centers and mixed-use developments

At least 18 major residential launches occurred in 2024 alone, concentrated in districts touched by transport upgrades. These areas typically see the highest appreciation potential and strongest rental demand due to improved accessibility and amenity integration.

The focus on transport-oriented development creates clear winners among neighborhoods, with properties near BRT stations and toll road access points commanding premium pricing and faster appreciation rates.

What are the differences in property appreciation between apartments, landed houses, and commercial spaces?

Apartments, particularly city center high-rises, currently show the highest appreciation rates and strongest future growth prospects due to limited land availability and strong demand from young professionals.

Standard houses experienced explosive 67.8% growth in the past year but are expected to stabilize at lower rates going forward as supply pipelines increase to meet demand. The dramatic recent appreciation may moderate as new developments come online.

Commercial properties demonstrate steady but lower growth rates at 13.8% annually, though specific hotspots with mixed-use developments and infrastructure benefits can significantly outperform market averages. Strategic commercial locations near transport hubs show stronger appreciation potential.

Long-term appreciation favors apartments in well-connected locations, while landed houses offer stability with moderate growth. Commercial properties provide steady returns but require careful location selection to achieve above-average appreciation.

How does the current cost of financing (mortgage rates, down payment requirements, lending conditions) affect the ability to buy now?

Current mortgage financing requires down payments of 10-30% of the property value, with most buyers paying 15-20% upfront, making initial capital requirements significant for property purchases.

The benchmark lending rate stands at 5.75% as of August 2025, with expectations for a decline to 5.25% in 2026. However, actual mortgage rates for property purchases typically range from 7-10% for local buyers, with higher rates applied to foreign investors.

Loan terms extend up to 25-30 years, though lenders apply increased scrutiny for non-primary residences and foreign investor applications. The lending environment remains relatively accessible for qualified borrowers with stable income documentation.

The anticipated rate decline in 2026 could improve affordability and stimulate additional demand, though current rates remain manageable for buyers with adequate financial preparation and down payment capacity.

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.

If the goal is to live in the property, which areas are considered most livable in terms of safety, amenities, and commute times?

Medan Baru stands out as the premier residential choice, offering excellent schools, shopping centers, and healthcare facilities with manageable commute times to major business districts.

Polonia and Setia Budi provide established residential environments with mature amenities, good security infrastructure, and access to international schools preferred by expatriate families. These areas balance urban convenience with residential comfort.

Northern Medan areas with BRT access offer improving livability due to enhanced connectivity, though some neighborhoods are still developing their retail and service infrastructure. The transport improvements make these areas increasingly attractive for residents.

Safety considerations favor central and established neighborhoods, as Medan's overall safety index rates as medium by Indonesian standards at 62. Residents should avoid outer urban fringe areas at night and non-integrated new townships lacking security infrastructure.

If the goal is rental income, which property type and budget range gives the best balance between occupancy and yield?

City center high-rise apartments in the IDR 1.7-2.5 billion ($104,000-$152,000) range provide the optimal balance of rental yield and occupancy rates, generating 5.5-6.5% gross returns.

Mid-market to upper-mid-range apartments in transit-linked northern areas offer similar yields while providing good tenant demand from professionals and expatriates. These properties avoid the vacancy risks associated with luxury segments while maintaining attractive returns.

Commercial shoplots in new mixed-use nodes near malls and commuter corridors can deliver yields exceeding 7%, though they require more active management and market knowledge to optimize occupancy rates.

Landed houses generate lower yields of 4-5% but provide stable, long-term tenancy arrangements, particularly in gated communities preferred by expatriate families. The trade-off involves lower returns for reduced management intensity and tenant turnover.

It's something we develop in our Indonesia property pack.

If the goal is resale profit, what segments of the market are most likely to see value growth in the short term versus long term?

What are the transaction costs (taxes, fees, permits) involved in buying and selling property in Medan right now, and how do they affect your net return?

Property buyers in Medan face total transaction costs of 6.5-9% of the purchase price, significantly impacting the initial investment required and break-even calculations.

The largest single cost is the Property Transfer Tax (BPHTB) at 5% of assessed value, paid by the buyer. Notary fees range from 1-2.5% of property value, while legal fees add another 0.5-1.5%. New properties also carry 10% VAT, substantially increasing costs for off-plan purchases.

Sellers face lower but still significant costs including 2.5% income tax on the sale price and agent fees of 3-5%. These costs must be factored into pricing strategies and profit calculations for investment properties.

Annual ongoing costs include Land and Building Tax (PBB) of 0.1-0.5% annually, while mortgage registration fees add 1% of the loan amount for financed purchases. These transaction costs align with Indonesian national averages but require careful consideration in investment calculations.

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.

Sources

1. Medan Price Forecasts - Bamboo Routes
2. Property Investment in Medan - Numbeo
3. Indonesia Property Price History - Global Property Guide
4. Rental Yields in Indonesia - Indoned
5. Medan Real Estate Trends - Bamboo Routes
6. Medan Indonesia Development Report - Mobilise Your City
7. Medan Indonesia Urban Analysis - Mobilise Your City
8. Medan Real Estate Market Analysis - Bamboo Routes
9. Indonesian Mortgage Requirements - The Lets Move Group
10. Indonesia Lending Rate - Trading Economics