Insights into Indonesia's Premium Residential Market: Trends and Opportunities
Uncover the key influences shaping Jakarta’s high-end housing market amidst global expansion
3 minutes to read
According to the Prime International Residential Index (PIRI) of the latest edition of The Wealth Report, there was a global growth of 3.1% in luxury residential prices. This positive trend was observed in 80 out of 100 cities and Asia-Pacific stood out as the region with the highest growth performance, reaching 3.8%. Within the same index, Indonesia's premium residential market demonstrated stability with a growth of approximately 0.6%.
According to the latest edition of Jakarta Property Highlight released by Knight Frank Indonesia, the residential property market in Jakarta, particularly the condominium segment, was predominantly driven by the middle-segment sector. This trend persisted despite ongoing economic uncertainties, with the Indonesian government implementing incentives to stimulate the condominium market.
Regarding premium residential properties, The Wealth Report provides a comparison of floor area for every US$1 million (approximately IDR 15.9 billion). The report highlights that the top five cities with the highest prices are Monaco City, Hong Kong, Singapore, London, and Geneva.
With regards to Jakarta, the average price of high-end apartment units was reported at IDR 57.7 million per square meter. This means that with US$1 million, one could acquire a luxurious apartment unit with approximately 276 square meters of floor area in Jakarta. This is a significantly larger property size compared to what the same US$1 million budget would fetch in other major Asian real estate markets. For instance, the same US$1 million investment could only purchase around 64 square meters of prime property in Tokyo, 32 square meters in Singapore, and just 22 square meters in Hong Kong. In other words, the high-end apartment unit that US$1 million can secure in Jakarta is roughly 4 times, 8 times, and 12 times the size of comparable prime properties in Tokyo, Singapore, and Hong Kong respectively.
In Indonesia, based on the high-end residential properties, which account for 3.7% of Jakarta's total property market, were priced at IDR 40 million per square meter, with the majority (76%) located in South Jakarta. The hot spots which are particularly attractive to real estate investors in South Jakarta include the Setiabudi and Kebayoran Baru districts. These areas are located relatively close to Jakarta's central business district, making them highly sought-after by corporate professionals, expatriates, and wealthy Indonesians. Property prices in these prime South Jakarta neighborhoods can reach around $4,000 per square meter, with rental yields averaging 8%.
The Senayan and SCBD (Sudirman Central Business District) areas within South Jakarta are also considered prime locations for luxury residential investment. The ongoing development and concentration of commercial activities in these districts have driven strong demand from high-net-worth individuals and families looking for premium living experiences in close proximity to Jakarta's business hub. Additionally, the upscale Dharmawangsa neighborhood in South Jakarta, known for its exclusive residential enclaves, has emerged as another desirable destination for high-end property investment. The area's proximity to the city center, coupled with its reputation for affluence and tranquility, make it an attractive option for investors seeking to cater to Jakarta's growing population of wealthy residents.
Overall, the combination of strategic location, robust infrastructure, and the concentration of affluent residents and corporate professionals has solidified South Jakarta's position as a prime target for luxury residential investment in the Indonesian capital.
Images portrayed above showcase the front view and indoor view of Natadesa, a resort residence located within the Jimbaran Hijau area which has achieved Greenship Neighbourhood Certification with a Platinum rating awarded by Green Building Council Indonesia.
For more insights on our latest edition of The Wealth Report, please click here: https://www.knightfrank.com/wealthreport.