Tue, 25 Feb 2003

Rulling on property sector must be relaxed

The Jakarta Post, Jakarta

The government needs to simplify the current procedures for foreigners to own property assets here amid rising global competition, according to an industry expert.

President of property consultant ERA Indonesia Moedjianto ST was quoted by Antara as saying on Monday that the existing regulations were discouraging foreigners from purchasing property in Indonesia.

He said that this situation was creating difficulties in the marketing of local property assets overseas, while at the same time foreign developers were increasingly aggressive in selling property assets overseas to Indonesians.

"The rules need to be loosened a bit so as to strengthen our competitiveness in the property sector. Under AFTA (ASEAN Free Trade Area), we're involved in marketing property assets.

"And we still find it hard to market Indonesian property overseas because of such regulations," Moedjianto said, adding that there were too many restrictions on foreigners owning property assets here.

Under Presidential Decree No. 44/1996 on rights to property assets, a foreigner is allowed ownership rights over property assets in the country for a period of 40 years.

Although title can be extended twice for 20 years each time, Moedjianto said that the regulation had dampened the appetite of foreigners for purchasing property here.

"The regulation makes it difficult for foreigners to own property in Indonesia. Why can't we have ownership periods like in other countries, whose expire dates be as much as 90 years?," Moedjianto asked.

While not elaborating on the ownership position regarding foreigners in the domestic property sector, he nevertheless said that foreigners had tremendous potential for the market.

Despite the prolonged economic crisis, the country's property sector has been steadily improving, with analysts predicting the sector could match pre-crisis levels in terms of sales in the near future.

For this year, Moedjianto went on, ERA had targeted more than Rp 3 trillion in sales, an around 30 percent rise over what was posted last year.