House prices fell by 0.92% y-o-y in 2019

Indonesia’s housing market remains sluggish, with the residential prices in the country’s 14 largest cities falling by 0.92% during 2019, from y-o-y declines of 0.17% in 2018, 0.1% in 2017, and 0.63% in 2016. House prices dropped 0.2% q-o-q during the latest quarter (Q4 2019).

Demand is almost steady

Residential property sales rose slightly by 1.19% in Q4 2019 from a year earlier, but actually declined 16.33% when compared to the previous quarter, according to Bank Indonesia.  Sales saw double-digit rises from 2013 to 2015.

Housing loans disbursed by banks increased almost 8% y-o-y in Q4 2019, compared to an annual growth of 13.9% in Q4 2018.

Rents, rental yields: yields are high in Jakarta at 7.09%

Apartment costs in Jakarta are low, at around $2,595 per sq.m. 

Indonesia: typical city centre apartment buying price, monthly rent (120 sq. m)
  Buying price Rate per month Yield
Jakarta   $311,400   $1,840 7.09%

Recent news: Indonesia’s economy grew by 5.02% in 2019, slightly slower than the prior year’s 5.17% growth, as investment and exports weakened, according to Statistics Indonesia. Recently, Bank Indonesia trimmed its 2020 economic growth forecast to 5% - 5.4%, from 5.1% - 5.5%. Bank Indonesia slashed its key rate by 25 basis points to 4.75% in February 2020, following four consecutive rate cuts of a total of 100 basis points since July 2019, to help mitigate the potential impact of the COVID-19 outbreak to the domestic economy.

After facing one of the most serious political and religious tensions in Indonesia’s history in 2018, political conditions have improved dramatically in recent months, with President Widodo’s popularity back to its near record highs. Widodo won a second term in office during the April 2019 elections, beating former general and longtime rival Prabowo Subianto.