A government plan to allow foreign nationals to buy houses and condominiums would provide an important boost to the economy, likely more than tripling the property sector’s contribution to 10 percent of GDP, industry players said on Tuesday.
“Currently, the property sector only contributes 2.7 percent to our national gross domestic product, but with the government regulation [on property ownership] revised, it’s possible that the contribution could be increased up to 10 percent,” Teguh Satria, chairman of the Indonesian Real Estate Developers Association (REI), said at the organization’s national congress.
“In comparison, Singapore gets about 35 percent of its GDP from its property sector, as foreigners are already allowed to own properties there,” he added.
Housing Minister Suharso Monoarfa last week said he planned to revise current regulations limiting ownership of property by foreign nationals by May or June. The change would allow foreigners to buy and own condominiums in large cities such as Jakarta and houses in special economic zones such as Batam.
James Riady, a property developer and deputy chairman of the Indonesian Chamber of Commerce and Industry (Kadin), argued that relaxing the laws on foreign ownership of property would provide local industry with an important stimulus.
“Not only will foreigners benefit from owning properties in Indonesia ... but the nation will be given a financial boost from the purchases. They would support the industrial sector, which has to be supported to face the recent free-trade agreement [with China],” he said.
Riady’s Lippo group spans property development, health care, education and media. The Jakarta Globe is affiliated with the group.