Apartment business
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