Apartment business
We welcome foreign investment in Indonesia. It will indeed create jobs, bring foreign currencies into Indonesia and improve trade, among other benefits.
Therefore I would like to suggest that we should also permit foreigners and foreign companies (based in Indonesia) to purchase apartments, condos and/or single family residences. Perhaps we should even allow them to invest in the purchase of apartment buildings, office buildings and factories.
The benefits to Indonesia and the Indonesian partners would be numerous, and both Indonesia and its partners have nothing to loose.
These buildings cannot be removed even if or when the foreign company or persons decide to return to their country of origin. Allowing foreigners to buy properties will boost the construction and develop architecture of the cities. Since they would have a feeling of ownership they would be quite prepared to pay more for the architectural and decorative fashions, things that they would not bother about if they were mere tenants of the buildings.
Our neighbor Singapore, for example, gains a lot from the scheme which allows foreigners to buy properties.
On the contrary, the property market in Indonesia is sluggish which in turn makes the prices to go down.
There are some reasons, I believe, why prices of houses and apartments continue to decrease.
* Over supply of houses and apartments.
* Hotels are even renting rooms and apartments to foreigners on a monthly basis, which diverts a large percentage of renters away from the market.
* Sales tax of five percent is levied on a sold property.
* Often a broker is involved which puts pressure on the sale price.
* Most investors have "wait and see" attitudes.
* Some investors are even going as far as waiting for President Soeharto to be re-elected.
* Very high bank interest rates.
* First-time buyers worry about the quality and on-time completion of apartments or houses they buy because some unreliable developers give many excuses for not completing a construction on time. Even very well-known companies sometimes build poor quality houses.
* A lot of Indonesian funds are being diverted to Singapore, Australia, China, America and other countries for more lucrative business dealings since they cannot expect profitable deals in Jakarta in the near future.
To help revive this situation and prevent further capital flight, we should consider allowing foreigners to buy apartments and houses. The foreigners cannot take the houses with them even when they decide to leave Indonesia.
EDWARD N.H. ABRAHAM
Jakarta