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ept. 12, p17

As Indonesia'€™s property market welcomes the government'€™s plan to allow foreigners to own high-end apartments in the country, developers nationwide are looking forward to its immediate effects.

Representing the voice of national developers, the Indonesian Real Estate Developers Association (REI) has expressed its support for the planned luxury apartment regulation, as the association believes foreign ownership of property will create a multiplier effect that can contribute to the wheel of the economy.

The Jakarta Post'€™s Aulia R. Sungkar recently talked with Eddy Hussy, REI chairman about the issue. The following are excerpts from the interview.

Question: Property ownership by foreigners has become a central talking point in Indonesia'€™s property industry. What is your view on this?

Answer: Foreign ownership of property is actually not a hot issue, as it is discussed in government regulations No. 40 and 41. Regulation No. 40 centers on the rights of foreigners with regard to property ownership, including the right to hold a leasehold title and the length of a lease, while Regulation No. 41 gives foreigners the right to purchase an apartment as long as it is on land with clear legitimate status.

Your comments:

This is so terribly confusing. In this article the minimum amount for owning a property is 5 billion. In the same paper, but two days later, this amount became 10 billion. There is no way that you can trust any local government agencies. Totally unprofessional and absolute clueless people

Rendang

Ownership security aside, there are 250 million people (think about that!) in Indonesia, and there are only two decent places to live (by decent I mean high-paying jobs/good healthcare/ongoing or planned credible investment projects/and decent places to spend money '€” hotels, restaurants, entertainment etc.). Those places are: Central Jakarta; Jakarta CBD and South Jakarta and southern Bali (Ubud down to Nusa Dua), which is smaller than Jakarta. For this reason, Jakarta and Bali have been topping worldwide high-end real estate growth rates over the past four years. Yes, the rupiah has fallen a lot.

But real estate prices in these areas have grown at 15 to 38 percent (yes, 38 percent '€” more than 10 percent higher than second place) per year over the past four years, with Jakarta topping global (yes, even higher than New York, London, etc.) growth in 2012 and 2013 and top ten in 2014. So, my point is this; if you can stomach the risk, then there might be something to this opportunity.

Obviously, it'€™s a big risk. But if there was no risk and a lot of upside potential, then you'€™d already be too late. Think about the facts; 250 million people, two places to live. Nowhere else to go because 99.999 percent of Indonesians can'€™t get jobs or visas for other countries!

Jacen

Looks like another half-hearted change going on. Let'€™s wait and see. If the government wishes to really attract foreign investment and claim that allowing foreigners to own property, which seems perfectly sensible to me, then do it properly; simply allow them to own the property they pay for without so many regulations.

Allowing foreigners to buy apartments with a value over US$380,000 will only benefit the rich, why not allow all Indonesians to sell their land/houses to foreigners at whatever price they wish. Why, again, should only the elite benefit? Why not the average Indonesian as well?

Phew

Anyone who buys a super-overpriced apartment with no secure ownership in Jakarta will deserve what they get. Nothing.

Testing

Until Indonesia starts treating all persons within its borders equally, it will continue to suffer. Its continued prejudice against selected individuals in the society, in this case foreigners, prevents it from entering the global arena.

HBM

US$380 could buy one a castle of an apartment. How long would this '€œownership'€ last? That'€™s not including nationalization of that asset if Indonesia gets a whacko in power.

Nate