Jakarta's rental yields are attractive
Residential Valuation Specialist | July 14, 2019
|Last Updated: Jul 14, 2019|
|JAKARTA - Apartments||COST (US$)||YIELD (p.a.)||PRICE/SQ.M. (US$)|
|TO BUY||MONTHLY RENT||TO BUY||MONTHLY RENT|
|50 sq. m.||139,350||604||5.20%||2,787||12.07|
|85 sq. m.||212,075||1,359||7.69%||2,495||15.99|
|120 sq. m.||311,400||1,840||7.09%||2,595||15.33|
|185 sq. m.||488,585||2,694||6.62%||2,641||14.56|
|50 sq. m.||1,107,150||3,729||4.04%||2,013||6.78|
All yields are gross - i.e., before taxes, repair costs, ground rents, estate agents fees, and any other costs. Net yields (what you´ll really earn) are typically around 1.5% to 2% lower.
Jakarta: Cilandak, Cipete, Kebayoran Baru, Menteng, Pondok Indah, Puri Indah
Bali: Canggu,Kuta, Seminyak and Ubud
Source: Global Property Guide Definitions: Data FAQ See also: Update Schedule
Gross rental yields in Jakarta - the return earned on the purchase price of a rental roperty, before taxation, vacancy costs, and other costs - are now very attractive, though lower than they were 4-5 years ago. Gross rental yields are an important consideration even for those who do not intend to become landlords, because a high rental yield indicates that the property market is reasonably priced.
Jakarta´s property market now looks well-priced.
Higher end apartments in Jakarta are now priced at around US$ 2,50to US$2,900 per square metre (sq. m.). Rental yields on these apartments are now around 7.4% to 8.5%, and have risen over the past two years.
The disadvantage of buying in Jakarta, for foreigners, is complex legalities and high transaction costs. However, changes in the law are in process which should make things much easier.
Villas on Bali attractively priced at around US$1,100 to US$2,300 per sq. m., judging by surveys that we conducted last year. On Bali, lower rental yields can be earned, at from 3.8% to 5.0%.
Round trip transaction costs are high in Indonesia. See our Property transaction costs analysis in Indonesia and Property transaction costs in Indonesia, compared to the rest of Asia.