Iran-US-Israel Conflict Escalates, Property Market Apprehensive
Jakarta—The escalating conflict in the Middle East is considered potentially destabilising for Indonesia’s property sector domestically.
Bambang Ekajaya, Vice-Chairman of Real Estat Indonesia (REI) and property practitioner, stated that the effects of global conflict could be felt directly and indirectly on the property industry.
According to Bambang, the most immediate impact stems from rising fuel prices which trigger increases in transportation costs. “Directly it affects transportation costs. As fuel prices rise, haulage costs increase. Given that all construction materials are heavy—cement, sand, steel, ceramics and so forth—this will impact construction costs,” Ekajaya told Kompas.com on Monday, 2 March 2026.
He continued that increased material distribution costs will automatically drive up property prices, particularly if conflict persists and global oil prices breach three digits per barrel again.
“So automatically property prices will rise if the war drags on and global oil prices hit three digits per barrel again,” he said.
Ekajaya even suggested oil prices could spike dramatically if conflict does not quickly ease. “Oil is forecast to rise tenfold if the war continues. Property suddenly has no price,” he stated.
Beyond direct impacts on construction costs, Ekajaya also highlighted indirect effects from global economic instability. Global economic turbulence could pressure the rupiah exchange rate and slow economic growth. This could ultimately lead to increased redundancies and declining consumer purchasing power.
“Ultimately there will be many layoffs, purchasing power drops, and the property market will also be hit hard. Prospective property buyers will adopt a wait-and-see stance,” Ekajaya said.
Earlier, Kompas.com reported that Iran was targeted by Israeli and US attacks on Saturday, 28 February 2026, local time. Israel was the first to confirm that the country officially attacked Iran. Shortly thereafter, US President Donald Trump officially announced that the United States had joined Israel in attacking Iran.
The Israeli and American war with Iran was marked by missiles raining down on Tehran’s skies. Several rockets struck several strategic locations, including residences in the Narmak neighbourhood of Tehran where former president Mahmoud Ahmadinejad resides.
Iran immediately retaliated against Israeli and US attacks by launching missiles at locations linked to US military operations, including Al Udeid Air Base in Qatar, Al-Salem Air Base in Kuwait, Al-Dhafra Air Base in the United Arab Emirates, and the headquarters of the US Fifth Fleet in Bahrain.