The Indonesian Real Estate Developers Association (REI) has called for foreign property ownership rules to be relaxed. Some members are asking for a change to the rules so that foreigners can buy leasehold titles on apartments and houses for a minimum of 75 years. Others are requesting foreigners be allowed to own and purchase property in the country outright.
Current land ownership laws stem from the 1960 Agrarian Law, and REI Chairman Teguh Satria said “If we continue to restrict titles to a maximum of 25 years for foreigners, we won’t be able to compete with neighbours. We don’t have to worry that we are selling land to foreigners, because if we sell an apartment, we are selling the space, not the land. We can keep restrictions on ownership so that only locals can own land.”
Satria noted that by relaxing the current laws, as many as 10,000 new apartments could be sold each year. This would generate an estimated $2.5 billion for the economy each year. There are fears in the Indonesian property market that foreigners will look elsewhere instead of going through the onerous process to buy in Indonesia. For example, Anton Sitorus, a property analyst at Jones Lang Lasalle, said: “If a foreigner wants to buy property in Singapore, he can buy it directly without having to go through any of the convoluted processes that we have in Indonesia.”
Useful Resources
