Let foreigners own apartments: CIPS

Let foreigners own apartments: CIPS

Abdul Khalik, The Jakarta Post, Jakarta

A noted property analyst urged the government on Wednesday to
allow foreigners to buy and own apartments here in order to boost
property sales and economic activity in the country.

Panangian Simanungkalit of the Center of Indonesian Property
Studies (CIPS) argued that allowing foreigners to own apartments
would benefit the country's economy.

"I don't understand why the government does not allow
foreigners to own apartments because other countries like
Thailand and China have long allowed foreign ownership of
apartments," he told a seminar on property on Wednesday.

Many foreigners who got married to Indonesians or simply
wanted to retire in the country have long complained that they
could not buy and own apartments or houses here.

Some of them have bought houses or apartments under their
spouse's names, but problems could arise in the event that the
marriage broke down, or the spouse died.

Panangian said that many foreign citizens have expressed
interest in owning apartments in Jakarta, but current regulations
prevent them from buying.

He gave an illustration that if only one percent of around
five million foreign tourists and businesspeople who came to
Indonesia every year bought apartments, the country could earn
huge amount of money in the form of foreign exchange.

"One percent means 50,000 apartments. If one apartment costs,
say, between Rp 1 billion and Rp 2 billion, then some Rp 100
trillion annually could be generated. This income will generate
other economic activities in the form of apartment furniture and
supplies," Panangian said.

He said foreigners who purchased apartments would help the
property industry, which saw sales of between 70 to 75 percent of
total supply this year.

According to Land Law No. 5 of 1960, foreigners are not
allowed to own land in Indonesia.

Anisa Himawan, CEO of PT Mandiri Eka Abadi, which built the
Pakubuwono Residence, agreed with Panangian, saying that a change
in the regulations would help the country's employment problems
as the Pakubuwono project alone employed over 4,000 workers.

"We hope the government allows foreigners to own apartments as
other countries do. Thailand, for instance, has allowed ownership
of buildings by foreign citizens for 70 years," she said.

Panangian also said that with the inflation rate expected to
reach over 16 percent this year, investing in property would be
seen as the safest as it bore low risk.

"With the current rate of inflation, I am sure that many
foreigners would prefer to invest their money in property, rather
than in other sectors," he said.