Thu, 15 Jan 2009
From: The Jakarta Globe
By Ardian Wibisono & Dian Ariffahmi
The Indonesian Real Estate Developers Association, or REI, is calling on the government to relax rules on property ownership for foreigners by extending them the right to purchase leaseholds titles to apartments and houses for a minimum of 75 years, or even allow them to purchase property outright.

The tight restrictions on foreign land ownership were originally introduced by the Agrarian Law in 1960 as part of a effort to force remaining Dutch property owners here to sell cheap and quit Indonesia.

Teguh Satria, the chairman of the REI, said that by relaxing the current strict regulations, the country’s property market could become as competitive as those in neighboring countries, such as Singapore, Malaysia, Vietnam and Thailand. It would also help property sales, which were expected to decline as a result of the crisis, and create a multiplier effect that would boost economic growth.

“If we continue to restrict titles to a maximum of 25 years for foreigners, we won’t be able to compete with neighbors,” Teguh said on Wednesday. “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.”

He said that easing the regulations would not in reality result in such radical changes as foreigners were already purchasing properties in Indonesia using Indonesian nationals as intermediaries.

Teguh said that if the government liberalized the ownership regime, 10,000 more new apartments could be sold every year. “If a unit costs $250,000, then this would generate an additional $2.5 billion a year for the industry; they will pay taxes to the government, they will spend money here, and the government and industry will benefit from the building of more apartments.”

The financial crisis also presented an opportunity for increased sales of apartments as prices are cheaper here than in neighboring countries like Singapore, he said, adding that properties in Jakarta, Bali and Batam would attract the greatest demand from foreign buyers.

Hendra Hartono, property consultant PT Procon Indah's chief business development officer, said that if the ownership regulations were eased for foreigners, apartment sales in Indonesia would definitely increase, although it was difficult to say by what extent.

The main factor that dissuades buyers is the fact that they cannot obtain freehold titles, he said.

“If they could obtain freehold titles, then they would be more interested in purchasing property here. Freehold title is much preferable to leasehold title, as, for example, they would be able to use their properties as collateral for loans,” Hendra said.

Hendra predicted that this year would prove to be a tough one for apartment and overall property sales. He said that while demand for high-end apartments would not be overly affected, demand for cheaper apartments aimed at those in the middle- and lower-income brackets would suffer because of the crisis.

“Falling mortgage rates in the coming months will not do much to spur demand from these segments as consumer purchasing power is decreasing,” he said.

Apartment sales have been slowing since the second half of last year, he added.

Anton Sitorus, a property analyst at Jones Lang Lasalle, said the existing regulations allowed foreigners to purchase 25-year leasehold titles, extendable twice up to a maximum of 70 years. However, the extension process was very complicated.

“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,” said Anton.



News Search/Filter
Transaction Rates
23 Jul 18
Buy
Sell
AED1
3,897.16
3,897.16
AFN1
196.36
196.36
ALL1
133.46
133.46
AMD1
29.81
29.81
ANG1
7,753.25
7,753.25
AOA1
55.94
55.94
ARS1
520.20
520.20
AUD1
10,637.91
10,637.91
AWG1
8,001.26
8,001.26
AZN1
8,407.81
8,407.81
BAM1
8,585.37
8,585.37
BBD1
7,157.15
7,157.15
BDT1
170.56
170.56
BGN1
8,585.32
8,585.32
BHD1
37,903.83
37,903.83
BIF1
8.01
8.01
BMD1
14,314.30
14,314.30
BND1
9,473.47
9,473.47
BOB1
2,085.79
2,085.79
BRL1
3,794.58
3,794.58
BSD1
14,314.30
14,314.30
BTC1
106,816,537
106,816,537
BTN1
209.15
209.15
BWP1
1,391.53
1,391.53
BYN1
7,213.66
7,213.66
BZD1
7,117.06
7,117.06
CAD1
10,910.17
10,910.17
CDF1
8.85
8.85
CHF1
14,443.85
14,443.85
CLF1
595,189.56
595,189.56
CLP1
21.66
21.66
CNH1
2,115.01
2,115.01
CNY1
2,117.84
2,117.84
COP1
5.00
5.00
CRC1
25.22
25.22
CUC1
14,314.30
14,314.30
CUP1
561.34
561.34
CVE1
151.55
151.55
CZK1
649.81
649.81
DJF1
80.40
80.40
DKK1
2,255.05
2,255.05
DOP1
288.71
288.71
DZD1
121.63
121.63
EGP1
801.06
801.06
ERN1
945.62
945.62
ETB1
517.50
517.50
EUR1
16,806.19
16,806.19
FJD1
6,777.77
6,777.77
FKP1
18,817.70
18,817.70
GBP1
18,817.70
18,817.70
GEL1
5,851.61
5,851.61
GGP1
18,817.70
18,817.70
GHS1
2,985.25
2,985.25
GIP1
18,817.70
18,817.70
GMD1
297.90
297.90
GNF1
1.57
1.57
GTQ1
1,909.23
1,909.23
GYD1
68.89
68.89
HKD1
1,823.60
1,823.60
HNL1
595.68
595.68
HRK1
2,269.44
2,269.44
HTG1
213.19
213.19
HUF1
51.65
51.65
IDR1
1.00
1.00
ILS1
3,939.05
3,939.05
IMP1
18,817.70
18,817.70
INR1
208.23
208.23
IQD1
12.07
12.07
IRR1
0.32
0.32
ISK1
134.87
134.87
JEP1
18,817.70
18,817.70
JMD1
109.72
109.72
JOD1
20,175.09
20,175.09
JPY1
128.88
128.88
KES1
143.20
143.20
KGS1
209.74
209.74
KHR1
3.52
3.52
KMF1
34.06
34.06
KPW1
15.90
15.90
KRW1
12.68
12.68
KWD1
47,312.67
47,312.67
KYD1
17,166.07
17,166.07
KZT1
41.58
41.58
LAK1
1.71
1.71
LBP1
9.47
9.47
LKR1
90.10
90.10
LRD1
93.40
93.40
LSL1
1,066.59
1,066.59
LYD1
10,446.91
10,446.91
MAD1
1,517.54
1,517.54
MDL1
863.31
863.31
MGA1
4.26
4.26
MKD1
272.33
272.33
MMK1
9.94
9.94
MNT1
5.86
5.86
MOP1
1,771.88
1,771.88
MRO1
40.20
40.20
MRU1
399.28
399.28
MUR1
417.81
417.81
MVR1
929.50
929.50
MWK1
19.70
19.70
MXN1
752.39
752.39
MYR1
3,524.39
3,524.39
MZN1
242.01
242.01
NAD1
1,066.59
1,066.59
NGN1
39.86
39.86
NIO1
451.69
451.69
NOK1
1,753.84
1,753.84
NPR1
130.72
130.72
NZD1
9,761.49
9,761.49
OMR1
37,187.55
37,187.55
PAB1
14,314.30
14,314.30
PEN1
4,370.78
4,370.78
PGK1
4,363.70
4,363.70
PHP1
270.08
270.08
PKR1
111.55
111.55
PLN1
3,890.20
3,890.20
PYG1
2.51
2.51
QAR1
3,931.31
3,931.31
RON1
3,600.38
3,600.38
RSD1
142.19
142.19
RUB1
225.79
225.79
RWF1
16.47
16.47
SAR1
3,816.79
3,816.79
SBD1
1,815.15
1,815.15
SCR1
1,057.85
1,057.85
SDG1
797.76
797.76
SEK1
1,617.84
1,617.84
SGD1
10,516.88
10,516.88
SHP1
18,817.70
18,817.70
SLL1
2.19
2.19
SOS1
24.91
24.91
SRD1
1,919.32
1,919.32
SSP1
109.88
109.88
STD1
0.68
0.68
STN1
675.20
675.20
SVC1
1,634.71
1,634.71
SYP1
27.80
27.80
SZL1
1,066.59
1,066.59
THB1
429.73
429.73
TJS1
1,530.83
1,530.83
TMT1
4,078.17
4,078.17
TND1
5,430.28
5,430.28
TOP1
6,154.20
6,154.20
TRY1
2,994.43
2,994.43
TTD1
2,125.37
2,125.37
TWD1
468.04
468.04
TZS1
6.27
6.27
UAH1
545.10
545.10
UGX1
3.85
3.85
USD1
14,314.30
14,314.30
UYU1
458.29
458.29
UZS1
1.83
1.83
VEF1
0.13
0.13
VND1
0.62
0.62
VUV1
131.21
131.21
WST1
5,520.57
5,520.57
XAF1
25.62
25.62
XAG1
222,393.88
222,393.88
XAU1
17,648,020.07
17,648,020.07
XCD1
5,296.59
5,296.59
XDR1
20,043.33
20,043.33
XOF1
25.62
25.62
XPD1
14,172,583.25
14,172,583.25
XPF1
140.83
140.83
XPT1
11,916,575.02
11,916,575.02
YER1
57.18
57.18
ZAR1
1,068.28
1,068.28
ZMW1
1,463.14
1,463.14
ZWL1
44.40
44.40
Taxation Exchange Rates
31 Aug 16 - 06 Sep 16
USD 1
13,232.00
AUD 1
10,043.30
CAD 1
10,213.70
DKK 1
1,999.40
HKD 1
1,706.22
MYR 1
3,283.28
NZD 1
9,623.63
NOK 1
1,605.23
GBP 1
17,433.70
SGD 1
9,757.68
SEK 1
1,569.45
CHF 1
13,631.10
JPY 100
13,101.00
MMK 1
11.01
INR 1
197.29
KWD 1
43,920.70
PKR 1
126.23
PHP 1
285.00
SAR 1
3,528.53
LKR 1
91.12
THB 1
382.08
BND 1
9,756.53
EUR 1
14,885.50
CNY 1
1,987.61

Okusi Associates: Indonesian Business & Management Services