Buying property in Surabaya: is it worth it?

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 Surabaya. 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 Surabaya, broken down by area?

As of September 2025, Surabaya's average property price stands at IDR 20 million per square meter (approximately USD 1,330).

Premium central areas including Gubeng and Darmo consistently exceed this citywide average, often reaching IDR 22-25 million per square meter. These districts command higher prices due to their established infrastructure, proximity to business centers, and mature residential communities.

Suburban and peripheral areas like Rungkut and Kertajaya historically traded between IDR 12-18 million per square meter but are rapidly catching up to city averages. The price gap between central and suburban areas has narrowed significantly as infrastructure development and population growth drive demand in these emerging neighborhoods.

Apartment units start from IDR 500 million (USD 35,000) for mid-market properties, with location and amenities being the primary price drivers. New developments in well-connected areas command premium pricing, while older projects in oversupplied segments may offer more affordable entry points.

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

How have property prices in Surabaya changed over the last 5 years, and what's the trend for the next 5 years?

Surabaya's property market has experienced substantial growth over the past five years, with residential prices rising 33-43% from 2020 to 2025.

Property values increased from IDR 14-15 million per square meter in 2020 to the current IDR 20 million per square meter in 2025. Looking at the longer term, prices have doubled since 2015 when they averaged around IDR 10 million per square meter, demonstrating the market's consistent upward trajectory.

The next five years (2025-2030) are projected to see more moderate but steady growth, with analysts forecasting a 3-5% compound annual growth rate (CAGR). This more measured pace reflects market maturation as supply catches up with demand, though infrastructure investments and continued economic development will support price appreciation.

Short-term drivers include high demand in well-connected suburbs and emerging districts benefiting from new transport links. Long-term growth is expected across most districts, particularly those positioned to benefit from planned infrastructure investments and urban expansion projects.

Which areas in Surabaya are expected to appreciate the most in the short term, medium term, and long term?

What are the main differences in price growth between apartments, landed houses, and commercial properties?

Landed houses have demonstrated the strongest and most resilient price growth among property types in Surabaya's market.

The post-pandemic preference for space and privacy has driven exceptional demand for landed properties, supported by limited land supply that naturally constrains inventory. This dynamic has created sustained upward pressure on house prices, making them the most reliable performers for capital appreciation.

Apartments present a mixed picture depending on specific project characteristics and locations. Modern, green-certified projects in prime locations perform exceptionally well, often matching or exceeding landed property returns. However, older developments and those in oversupplied peripheral areas may experience price stagnation or minimal growth.

Commercial properties often deliver higher yields and strong demand along established growth corridors, though their appreciation varies significantly based on location and specific commercial segment. Prime retail and office spaces in central business districts typically outperform suburban commercial properties.

How does rental yield vary across different areas and property types in Surabaya?

Surabaya's rental market offers attractive yields ranging from 4.9% to 15%, with the citywide average of approximately 7.2% significantly exceeding Jakarta's returns.

Apartments typically generate gross yields between 7-12%, with one-bedroom units producing 7-10% and two-bedroom properties achieving 8-12%. The variation depends heavily on location, with newer developments in prime areas commanding premium rents while older stock in oversupplied segments may underperform.

Landed houses consistently deliver higher yields, typically ranging from 10-15%, particularly for properties with three or more bedrooms or those located in gated communities. The strong preference for houses among families and expatriates supports robust rental demand and pricing power.

Luxury villas represent the premium segment with yields of 12-18%, while commercial properties along high-traffic corridors can achieve exceptional returns of 30-40%. These commercial yields reflect the strong business activity and limited supply of prime commercial space in key locations.

Rental yields tend to be highest near universities, new infrastructure developments, and in outer districts experiencing strong population growth and limited rental supply.

What's the typical occupancy rate for rental properties in Surabaya right now?

Occupancy rates for rental properties in Surabaya remain robust, commonly exceeding 80% for prime and central locations as of September 2025.

The strong occupancy levels are underpinned by steady population dynamics, corporate relocation demand, and the city's growing appeal as a business and educational hub. Properties in established districts with good infrastructure connectivity typically maintain the highest occupancy rates.

Apartments in oversupplied areas and older developments may perform below the city average, while newer properties or those serving specific market niches maintain high absorption rates. The rental market benefits from diverse demand sources including students, young professionals, expatriate workers, and families.

Properties near universities, business parks, and major employment centers consistently achieve occupancy rates above the city average, while suburban and peripheral locations may experience more seasonal variation in tenant demand.

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How quickly do properties usually resell in Surabaya, and at what average profit margin?

Properties in liquid, desirable districts of Surabaya typically sell within 3-6 months under normal market conditions.

Prime locations with strong fundamentals and established buyer interest tend to achieve faster transaction times, while properties in overbuilt apartment segments or fringe areas may face extended marketing periods. The resale timeline is heavily influenced by pricing strategy, property condition, and market timing.

Conservative resale margins for investors typically range from 10-20% over a five-year holding period for well-performing assets. This assumes purchase in fundamentally sound locations and normal market appreciation over the holding period.

Short-term flips or speculative resales carry higher risk due to substantial transaction costs and increasing market competition. The total transaction costs of 8-11% significantly impact quick resale profitability, making longer-term holds more suitable for most investors.

What are the upfront costs and transaction fees when buying property in Surabaya?

The total cost of property acquisition in Surabaya typically ranges from 8-11% of the transaction value when accounting for all fees and taxes.

The primary cost component is the transfer tax (BPHTB) at 5% of the transaction value, which is standard across Indonesia. Notary and legal fees add another 1-2% of the transaction value, covering documentation, due diligence, and registration processes.

Agent fees typically range from 2-3% for buyers, though this can vary based on the specific transaction and services provided. For sellers, agent fees generally range from 2-5% depending on the property type and marketing requirements.

New or primary properties are subject to 11% VAT for units above certain price thresholds, though temporary incentives like VAT relief on the first IDR 2 billion were available until June 2025. Foreign buyers may require additional legal and management fees for structuring purchases through Hak Pakai or PT PMA entities.

For large transactions or foreign buyers requiring complex legal structures, additional legal and administrative costs may apply, potentially adding 1-3% to the total acquisition cost.

What budget ranges make the most sense for investors versus people buying to live in Surabaya?

Investment-focused buyers typically target properties in the IDR 500 million to 1.5 billion range (USD 35,000-100,000) for yield-generating apartments and houses in growth areas.

This budget range provides access to well-located properties that can generate attractive rental returns while offering reasonable prospects for capital appreciation. Investors seeking commercial properties or luxury residential assets may budget IDR 1.5-20 billion or more, depending on their return targets and risk tolerance.

Owner-occupiers generally seek properties in the IDR 1-2.2 billion range (USD 70,000-150,000) for mid-range homes that balance lifestyle requirements with affordability. This budget provides access to quality housing in established neighborhoods with good infrastructure and amenities.

Expatriate families and high-income buyers in upper-tier suburbs may budget significantly higher, particularly for properties in premium developments like Citraland or West Surabaya. Entry-level buyers can find one-bedroom apartments under USD 50,000 in outer areas or oversupplied segments, though these may offer limited appreciation potential.

If I buy now, which neighborhoods offer the best balance between affordability, rental demand, and long-term growth?

Rungkut stands out as offering exceptional value with its combination of affordable entry prices, rapid capital gains potential, and rising rental demand from families and students.

This emerging district benefits from ongoing infrastructure development while maintaining price points below city averages, making it attractive for both investors and owner-occupiers seeking growth potential. The area's proximity to educational institutions and business centers supports consistent rental demand.

Kertajaya offers excellent value for money with strong appeal among mid-income renters and families seeking quality housing at reasonable prices. The neighborhood's developing infrastructure and community amenities position it well for sustained appreciation.

Central areas including Darmo provide strong rental market fundamentals and good long-term price resilience, though at higher entry costs. These established neighborhoods offer stability and consistent performance for investors prioritizing income generation over aggressive growth.

West Surabaya and Citraland command premium prices but offer the best infrastructure, international schools, and lifestyle amenities. These areas are particularly popular among expatriates and affluent Indonesian families, supporting both rental demand and long-term value retention.

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

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.

For living purposes, which areas of Surabaya are most convenient in terms of infrastructure, schools, and amenities?

Citraland, Darmo, and West Surabaya represent the premium tier for expatriate families and those prioritizing top-tier infrastructure and international education options.

These established areas offer the best selection of international schools including Surabaya European School, Surabaya Intercultural School, and Surabaya Cambridge School. The neighborhoods feature gated housing developments, proximity to modern shopping centers and business parks, and reliable city infrastructure including consistent utilities and well-maintained roads.

Central districts including Gubeng and Tegalsari provide excellent access to city amenities, hospitals, and transport networks while maintaining more moderate housing costs. These areas offer good connectivity to employment centers and a wide range of local services and entertainment options.

New townships such as Pakuwon and developments in East Surabaya offer modern infrastructure, contemporary schools, and suburban comforts with planned community amenities. These areas appeal to families seeking newer facilities and organized community environments.

The concentration of quality educational options in these established and emerging residential corridors makes them particularly attractive for families with school-age children, while their infrastructure development supports long-term livability and property values.

For investment, which property type and location in Surabaya gives the best positioning right now?

Landed houses in central business and education corridors offer the most reliable combination of stable rental income and long-term capital appreciation for conservative investors.

Properties in Gubeng, Darmo, and areas adjacent to new transport hubs provide immediate rental demand from families and professionals while benefiting from established infrastructure and ongoing development. These locations offer the best positioning for price gains and sustained rental demand through 2025-2028.

Green-certified or smart apartments target the next generation of buyers and tenants who prioritize sustainability and modern amenities. These properties typically command premium rents and maintain strong occupancy rates in prime locations.

Commercial and retail spaces along major arterial roads deliver high yields for investors comfortable with commercial property management. Prime locations in established business districts offer the strongest income potential, though require higher initial investment and more active management.

Emerging suburbs including Rungkut and East/West Surabaya development corridors provide the best growth potential for investors willing to accept slightly higher risk in exchange for superior appreciation prospects. These areas benefit from infrastructure development and population growth while maintaining more accessible entry prices.

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. Surabaya Price Forecasts - BambooRoutes
2. Surabaya Property Market - BambooRoutes
3. Indonesia Property Market - Juwai Asia
4. Surabaya Real Estate Trends - BambooRoutes
5. Indonesia Property Buying Process
6. Indonesia Price History - Global Property Guide
7. Indonesia Property Prices - Centrarium
8. Indonesia House Prices - Investasian