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xperts and expatriates have welcomed the government'€™s plan to allow foreigners to own apartments worth at least Rp 10 billion (US$697,913), but say that the policy can only do so much in helping stoke economic activity.

Coodinating Economic Minister Darmin Nasution announced on Thursday that, as part of the government'€™s economic policy package to ameliorate weakness in the country'€™s economy, foreign ownership will be allowed for apartments worth at least Rp 10 billion in a move that liberalizes the property sector within certain limits.

But the Rp 10 billion threshold is still considered too high by many expatriates, and that it would narrow the possibility of attracting foreigners in purchasing apartments here because only a few buyers fall into that segment, according to experts and expatriates contacted by The Jakarta Post.

Korean Chamber of Commerce in Indonesia chairman CK Song said that while the policy serves as positive and reassuring news for foreigners wishing to own apartments in Indonesia, the Rp 10 billion threshold will unlikely attract much demand because only a few foreigners would have that kind of individual purchasing power.

'€œRental fees are quite expensive here [in Jakarta], but if they are flexible [in terms of the Rp 10 billion guideline], it would be much more attractive and can really boost the Indonesian property industry,'€ Song said on Thursday.

According to Song, average apartment rental rates within the metropolitan Jakarta area for expats can range around US$1,500 to $3,500 per month, and average rates within the Greater Jakarta area itself can reach $1,000 to $1,500 per month depending on the size and location.

Finance Minister Bambang Brodjonegoro previously considered a threshold of Rp 5 billion, but the planned revision of government regulation No. 41/1996 on housing ownership by foreigners would stipulate Rp 10 billion instead.

Foreigners had been limited by the previous regulation to purchase only strata title-type properties, which include '€œright to use'€ buildings only '€” excluding land '€” through a building ownership certificate (SKBG) for a 25-year period with the opportunity to extend.

Meanwhile, Indonesian Real Estate Association (REI) vice chairwoman Theresia Rustandi commented that the market for apartments costing over Rp 10 billion would be rather low, but the market could now be filled by foreigners outside the country who wish to own property in Indonesia as retirement or vacation homes.

'€œForeigners are not the type of people that would buy multiple apartments at once, it depends on their purchasing power as well. But the policy is able to attract foreigners working overseas who wish to own property here in Indonesia as secondary homes. As a result, it would definitely help economic growth and develop our economy,'€ Theresia told the Post.

Moreover, some experts have warned to approach this announcement with caution as most of the details surrounding how foreign ownership would work have yet to be clarified by the government, especially regarding certification.

Head of advisory at Jones Lang Lasalle (JLL), Vivian Harsanto, said that the country should not hold its breath regarding a significant economic impact because the largest segment in the property market is the middle class segment, which is placed below the Rp 10 billion threshold.

Any real effects towards the property market will also have to wait on further details from the government regarding how the regulation will work, she added.

'€œForeign ownership is not really a new thing because many have followed the 25 year system over the years. What we are waiting for now is the details on how this regulation will work,'€ Vivian said.