Editors note: as further proof of what I've been saying for some time that Australians have fallen back in love in Bali and are pouring in their new revalued Austrian dollars in to Bali real estate as well,
Below are the recent visits to up our main real estate website PT Bali real estate.com
Also note that although Americans only represent possibly 2% of tourist arrivals to Bali they are the second-largest group seeking real estate in Bali along with the Russians, Indonesians, and Canadians who have discovered Bali the last several years
Country Percentage of Visitors
1. AUSTRALIA 62.5%
2. united states (View Map) 14.58%
3. RUSSIAN FEDERATION 7.29%
4. INDONESIA 5.73%
5. canada (View Map) 4.69%
6. SWEDEN 1.04%
7. UNITED KINGDOM 1.04%
8. NEW CALEDONIA 1.04%
9. NEW ZEALAND 0.52%
10. JAPAN 0.52%
11. GREECE 0.52%
12. LATVIA 0.52%
Showing posts with label Bali Real Esate. Show all posts
Showing posts with label Bali Real Esate. Show all posts
Sunday, November 28, 2010
Sunday, October 31, 2010
Foreign Investment in Indonesia Up 32%, With Property Leading Way
Shirley Christie | October 31, 2010
BKPM chairman Gita Wirjawan, right, with board officials M. Azhar Lubis, middle, and M Yusan at Sunday’s announcement. (Antara Photo) BKPM chairman Gita Wirjawan, right, with board officials M. Azhar Lubis, middle, and M Yusan at Sunday’s announcement. (Antara Photo)
Indonesia. Indonesia saw foreign direct investment jump 32 percent to Rp 111.1 trillion ($12.4 billion), excluding oil and gas, and banking, in the first nine months of the year, with the property sector attracting the most investment.
“The investment realization figures are very promising,” Gita Wirjawan, chairman of the Investment Coordinating Board (BKPM), said at the board’s headquarters in Jakarta on Sunday.
He said the increase had been supported by improvements in investment regulations and better coordination between the central and regional governments.
“If we continue to work hard to further enhance these synergies, I firmly believe this will continually be reflected in the investment figures,” he said.
Eric Sugandi, an economist from Standard Chartered in Jakarta, backed Gita’s assessment. “In 2009, investors might have had doubts, but this year they are confident,” he said
The BKPM on Sunday announced investment figures from foreign and domestic investors. Foreign and domestic investment came to Rp 149.8 trillion this year through September.
Among notable recipients of foreign funding were the real estate, industrial estate and office- building sector, with $800 million. It was followed by mining ($700 million; 88 projects); transportation, storage and telecommunications ($600 million); foodstuffs ($400 million); and plantations ($300 million).
The BKPM also released data on domestic investment showing it had risen 36.5 percent to Rp 38.5 trillion from a year earlier.
The top five sectors were plantations (Rp 4.5 trillion); transportation, storage and telecommunications (Rp 3.1 trillion); foodstuffs (Rp 2.8 trillion); chemicals and pharmaceuticals (Rp 1.4 trillion); and other services (Rp 1.1 trillion).
“Besides a significant increase in the total investment figures, two positive outcomes must be underlined,” Gita said. “The first is the increase in domestic investment, and the second an increase in investments outside of Java.”
Investments outside Java, Indonesia’s most populous island and economic hub, contributed 37.7 percent, or Rp 21.4 trillion, of the nation’s total. Regional investment more than tripled from Rp 5.9 trillion a year earlier.
Foreign investors have been drawn by the country’s resilience in the face of the global economic downturn. Indonesia’ strong domestic market, paired with a lack of reliance on exports, saw the economy grow 4.5 percent last year as many of its regional rivals were mired in recession.
Indonesia’s relatively high key interest rate of 6.5 percent has also drawn attention from investors seeking higher returns. Growing political stability and the prospect of gaining investment-grade ratings for sovereign debt have also reassured investors.
“Considering the realization through the third quarter of 2010, we are sure that the target of Rp 160.1 trillion is going to be accomplished. We might even surpass Rp 180 trillion by the end of year,” said the BKPM’s deputy chairman, M Yusan.
According to Fauzi Ichsan, another Standard Chartered economist, the key to making Indonesia more attractive is improving infrastructure, including roadways, power plants and harbors.
Beginning this year, investment figures have been gathered by a data collection agency, Investment Activity Reports (LKPM), which requires all companies to report investment realizations every quarter.
Last year, the calculation method was based on the issuance of permanent business licenses, under which companies reported investment only after the project was completed. The BKPM said the 2009 and 2010 figures were not directly comparable as a result.
The BKPM data excluded investment in the oil and gas sector, banking, non-banking financial institutions and leasing.
http://www.thejakartaglobe.com/business/foreign-investment-in-indonesia-up-32-with-property-leading-way/404241
Saturday, September 18, 2010
House Hunting in ... Indonesia
Thursday, September 16, 2010
By VIRGINIA C. McGUIRE, The New York Times
A FURNISHED OPEN-AIR HOME ON A BEACHFRONT ESTATE ON THE ISLAND OF BALI
$3 MILLION
This property, consisting of six structures with a total of six bedrooms and seven baths, is a few miles north of the village of Candi Dasa on Bali's east coast. The main living space, completed in 2008, is an open-air pavilion facing the water, with a living room on the top floor and a dining room below. Bamboo screens can be lowered to protect the space from rain. The master suite, a separate structure adjacent to the main pavilion, has a bedroom, a sitting area and two bathrooms; all the rooms have views of the ocean and Bali's tallest mountain, Gunung Agung.
Two guest cottages, each with one bedroom, are nearby. Antique salvaged wood is used throughout most of the property. The roofs are thatched and sweep upward at the front and back, an architectural style from the Minangkabau culture of Western Sumatra, another island in the Indonesian archipelago.
The property also has two modern villas, one with one bedroom and one with two. Water features on the property include a swimming pool, a river and a shallow manmade lake with lily pads and water birds. The furniture is included in the sale.
All beaches in Indonesia are owned by the state, but this remote beach is rarely visited by outsiders. The waves are suitable for surfing, and fishing boats pass in front of the property. The island of Lombok is visible in clear weather.
The nearest market is five minutes away in Amlapura, and restaurants and hotels in the tourist town of Candi Dasa are 15 minutes away. It takes about two hours to drive to the airport in Denpasar, but a highway currently being built is expected to cut travel time.
MARKET OVERVIEW
The market in Bali for properties costing more than $750,000 faltered a bit during the economic downturn, said Jeffrey Kam, Knight Frank Indonesia's Jakarta-based residential director.
Matthew Georgeson, a partner at Elite Havens, a real estate firm in Bali, said the lack of financing for foreigners in Bali's property market had helped insulate it from the credit crunch. Mr. Kam estimated that the cost of vacant land in Bali had risen 20 percent over the past two years, especially in the villages of Bukit, Uluwatu and Ungasan, where recent hotel developments have attracted investors. He said the thriving tourism industry in Seminyak was also pushing prices up there.
Besides Bali, expatriates are most likely to live in the capital city, Jakarta, because of its business community. Mr. Kam says a typical apartment for a foreign business person in Jakarta costs 15,000,000 to 25,000,000 rupiahs per square meter ($155 to $258 per square foot, at 9,000 rupiahs to the dollar).
A 4,800 square-foot house with high-quality finishes and a quarter-acre of land in a popular tourist area costs about $1 million, Mr. Georgeson said. The property here is priced well above the average villa because of the quality of the architecture and because it is extremely rare to find a six-acre oceanfront estate.
WHO BUYS IN BALI
Bali's foreign buyers are more likely to be expatriates, Mr. Georgeson said. Such buyers come from other Asian countries, as well as Australia, France and England. "It really is the United Nations of buyers," he said. According to Mr. Kam, the country's immigration records show an increase in visitors from China and Russia recently.
BUYING BASICS
It is illegal for foreigners to own property in Indonesia, although Mr. Kam said the government was considering loosening the rules.
In the meantime, according to Mr. Georgeson, there are two common ways around the constraints. The first, getting a right-of-use certificate from the government, involves paying higher taxes. The other is finding a "nominee," an Indonesian citizen who will hold the title. "If you want to control the title," Mr. Georgeson said, "you've got to use a nominee."
The foreigner obtains a long-term lease on the property, often placing a lien on the title so the nominee won't have the power to sell without consent. Mr. Georgeson says that although many regular visitors to Bali use trusted local friends or employees as their nominees, there are also notaries who offer professional nominee services.
The government charges a transfer tax when property changes hands. Mr. Georgeson said the buyer pays 5 percent of the assessed value, which in Bali is much lower than the market value. Ultimately the transfer tax is usually 1 or 1.5 percent of the purchase price.
Other transaction costs include a 1 percent notary fee. Mr. Georgeson describes the notary as a government agent who acts for both parties. Hiring a private lawyer is optional but recommended. Lawyer fees usually run 0.5 to 1 percent of the purchase price.
Most properties are priced in United States dollars, and Mr. Georgeson says it is not uncommon for properties to be offered for sale without public announcements. In such cases, the services of a real estate agent are crucial. Land is usually priced in rupiah.
Read more: http://www.post-gazette.com/pg/10259/1088000-30.stm#ixzz0zwHboB4q
http://www.post-gazette.com/pg/10259/1088000-30.stm
By VIRGINIA C. McGUIRE, The New York Times
A FURNISHED OPEN-AIR HOME ON A BEACHFRONT ESTATE ON THE ISLAND OF BALI
$3 MILLION
This property, consisting of six structures with a total of six bedrooms and seven baths, is a few miles north of the village of Candi Dasa on Bali's east coast. The main living space, completed in 2008, is an open-air pavilion facing the water, with a living room on the top floor and a dining room below. Bamboo screens can be lowered to protect the space from rain. The master suite, a separate structure adjacent to the main pavilion, has a bedroom, a sitting area and two bathrooms; all the rooms have views of the ocean and Bali's tallest mountain, Gunung Agung.
Two guest cottages, each with one bedroom, are nearby. Antique salvaged wood is used throughout most of the property. The roofs are thatched and sweep upward at the front and back, an architectural style from the Minangkabau culture of Western Sumatra, another island in the Indonesian archipelago.
The property also has two modern villas, one with one bedroom and one with two. Water features on the property include a swimming pool, a river and a shallow manmade lake with lily pads and water birds. The furniture is included in the sale.
All beaches in Indonesia are owned by the state, but this remote beach is rarely visited by outsiders. The waves are suitable for surfing, and fishing boats pass in front of the property. The island of Lombok is visible in clear weather.
The nearest market is five minutes away in Amlapura, and restaurants and hotels in the tourist town of Candi Dasa are 15 minutes away. It takes about two hours to drive to the airport in Denpasar, but a highway currently being built is expected to cut travel time.
MARKET OVERVIEW
The market in Bali for properties costing more than $750,000 faltered a bit during the economic downturn, said Jeffrey Kam, Knight Frank Indonesia's Jakarta-based residential director.
Matthew Georgeson, a partner at Elite Havens, a real estate firm in Bali, said the lack of financing for foreigners in Bali's property market had helped insulate it from the credit crunch. Mr. Kam estimated that the cost of vacant land in Bali had risen 20 percent over the past two years, especially in the villages of Bukit, Uluwatu and Ungasan, where recent hotel developments have attracted investors. He said the thriving tourism industry in Seminyak was also pushing prices up there.
Besides Bali, expatriates are most likely to live in the capital city, Jakarta, because of its business community. Mr. Kam says a typical apartment for a foreign business person in Jakarta costs 15,000,000 to 25,000,000 rupiahs per square meter ($155 to $258 per square foot, at 9,000 rupiahs to the dollar).
A 4,800 square-foot house with high-quality finishes and a quarter-acre of land in a popular tourist area costs about $1 million, Mr. Georgeson said. The property here is priced well above the average villa because of the quality of the architecture and because it is extremely rare to find a six-acre oceanfront estate.
WHO BUYS IN BALI
Bali's foreign buyers are more likely to be expatriates, Mr. Georgeson said. Such buyers come from other Asian countries, as well as Australia, France and England. "It really is the United Nations of buyers," he said. According to Mr. Kam, the country's immigration records show an increase in visitors from China and Russia recently.
BUYING BASICS
It is illegal for foreigners to own property in Indonesia, although Mr. Kam said the government was considering loosening the rules.
In the meantime, according to Mr. Georgeson, there are two common ways around the constraints. The first, getting a right-of-use certificate from the government, involves paying higher taxes. The other is finding a "nominee," an Indonesian citizen who will hold the title. "If you want to control the title," Mr. Georgeson said, "you've got to use a nominee."
The foreigner obtains a long-term lease on the property, often placing a lien on the title so the nominee won't have the power to sell without consent. Mr. Georgeson says that although many regular visitors to Bali use trusted local friends or employees as their nominees, there are also notaries who offer professional nominee services.
The government charges a transfer tax when property changes hands. Mr. Georgeson said the buyer pays 5 percent of the assessed value, which in Bali is much lower than the market value. Ultimately the transfer tax is usually 1 or 1.5 percent of the purchase price.
Other transaction costs include a 1 percent notary fee. Mr. Georgeson describes the notary as a government agent who acts for both parties. Hiring a private lawyer is optional but recommended. Lawyer fees usually run 0.5 to 1 percent of the purchase price.
Most properties are priced in United States dollars, and Mr. Georgeson says it is not uncommon for properties to be offered for sale without public announcements. In such cases, the services of a real estate agent are crucial. Land is usually priced in rupiah.
Read more: http://www.post-gazette.com/pg/10259/1088000-30.stm#ixzz0zwHboB4q
http://www.post-gazette.com/pg/10259/1088000-30.stm
Tuesday, September 7, 2010
Suharto's son sues Garuda over in-flight mag article
September 8, 2010 - 10:32AM
The youngest son of late Indonesian dictator Suharto defended his "honour" on Tuesday as he sued national carrier Garuda for an article in its in-flight magazine which called him a murderer.
Hutomo Mandala Putra, popularly known as Tommy Suharto, served only four years of a 15-year prison term for ordering the murder of a supreme court judge in 2001.
Tommy is demanding an apology from state-owned Garuda and the publishers of its in-flight magazine, which referred to him as a murderer in a 2009 article about a resort he owns on Bali.
Lawyer Ferry Firman Nurwahyu said the remark came in a footnote which had "no relevance to the title or the content of the article".
"Tommy Suharto felt the note was ethically-defective and insensitive as it attacked his honour, dignity and privacy," he said.
Tommy is demanding a public apology in the magazine as well as three national newspapers.
A playboy with a taste for flashy cars, Tommy enjoyed privileged access to lucrative business deals before the Asian financial crisis triggered his father's downfall in 1998.
The murdered judge, Syafiuddin Kartasasmita, had sentenced Tommy to 18 months in jail for corruption.
Military strongman Suharto died of natural causes in January, 2008, a decade after resigning from office following 32 years of autocratic and corrupt rule.
From http://www.smh.com.au/travel/travel-news/suhartos-son-sues-garuda-over-inflight-mag-article-20100908-1504s.html
The youngest son of late Indonesian dictator Suharto defended his "honour" on Tuesday as he sued national carrier Garuda for an article in its in-flight magazine which called him a murderer.
Hutomo Mandala Putra, popularly known as Tommy Suharto, served only four years of a 15-year prison term for ordering the murder of a supreme court judge in 2001.
Tommy is demanding an apology from state-owned Garuda and the publishers of its in-flight magazine, which referred to him as a murderer in a 2009 article about a resort he owns on Bali.
Lawyer Ferry Firman Nurwahyu said the remark came in a footnote which had "no relevance to the title or the content of the article".
"Tommy Suharto felt the note was ethically-defective and insensitive as it attacked his honour, dignity and privacy," he said.
Tommy is demanding a public apology in the magazine as well as three national newspapers.
A playboy with a taste for flashy cars, Tommy enjoyed privileged access to lucrative business deals before the Asian financial crisis triggered his father's downfall in 1998.
The murdered judge, Syafiuddin Kartasasmita, had sentenced Tommy to 18 months in jail for corruption.
Military strongman Suharto died of natural causes in January, 2008, a decade after resigning from office following 32 years of autocratic and corrupt rule.
From http://www.smh.com.au/travel/travel-news/suhartos-son-sues-garuda-over-inflight-mag-article-20100908-1504s.html
Money Can Buy People Happiness, But Only Up to $75,000, Study Finds
Money Can Buy People Happiness, But Only Up to $75,000, Study Finds
Randolph Schmid | September 07, 2010
Washington. They say money can’t buy happiness. They are wrong. To a point, at least.
A study in the latest edition of Proceedings of the National Academy of Sciences reveals that people’s emotional well-being increases along with their income up to about $75,000.
For people earning less than that, it’s harder to be happy, according to Angus Deaton, an economist at Princeton University’s Center for Health and Wellbeing. “Things are so in your face. It interferes with your enjoyment,” he said.
Deaton, with Nobel Prize-winning psychologist Daniel Kahneman, reviewed surveys of 450,000 Americans conducted in 2008 and 2009 for the Gallup-Healthways Well-Being Index, which included questions on people’s overall life satisfaction.
Happiness got better as income rose but the effect leveled out at $75,000, Deaton said. Their sense of success or well-being continued to rise as their earnings grew beyond that point.
“Giving people more income beyond $75,000 is not going to do much for their daily mood but it is going to make them feel they have a better life,” Deaton said.
Not surprisingly, someone who moves from a job that pays $100,000 a year to another one that pays $200,000 has an improved sense of success. But it does not mean more happiness.
Deaton said the results were similar for other measures. For example, people were happier on weekends, but their deeper sense of well-being did not change.
Kahneman and Deaton undertook the study to learn more about economic growth and policy. Some have questioned the value of economic growth to individuals, and Deaton said they were far from definitively resolving that question.
“Working on this paper has brought me a lot of emotional well-being. As an economist I tend to think money is good for you, and am pleased to find some evidence for that,” he said.
In the study, the researchers found that overall, “most people were quite happy and satisfied with their lives.”
Comparing American life-satisfaction results with those of other countries, they said the United States ranked ninth after the Scandinavian countries, Canada, the Netherlands, Switzerland and New Zealand.
The research was supported by the Gallup Organization and the National Institute on Aging.
http://www.thejakartaglobe.com/business/money-can-buy-people-happiness-but-only-up-to-75000-study-finds/395079
Monday, August 23, 2010
Bali- Island holiday homes beckon for Aussies
Fiji is among the destinations where Australians are buying holiday homes / Vomo Island Source: Supplied
FORGET the traditional shack on the coast - Australians are taking advantage of the strong Aussie dollar and abundance of budget flights to buy holiday homes overseas instead.
Fiji, Bali and Malaysia are among the most popular destinations for people looking to buy international properties as investments and vacation getaways.
"There's an increased number of people buying in New Zealand as well and that's mainly due to the fact they have some favourable exemptions there, such as no capital-gains tax," Property Planning Australia director Angelo Piazetta said.
"I think it just depends on who has the best marketing - in the past year people have been interested in Malaysia because there's new complexes or apartments going up there."
Bob Lowres and his wife, Libby, had been looking to buy a property in Noosa, but decided they could get more bang for their buck in Fiji when they decided to move from Brisbane eight years ago.
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Related Coverage
* Fiji's dictator mustn't get away with it The Australian, 18 Jul 2010
* Developer pursues island dream The Australian, 30 Jun 2010
* Stepping out in $30,000 style Herald Sun, 30 Jun 2010
* The Bula effect The Australian, 21 May 2010
* Y they like folksy holiday Herald Sun, 9 May 2010
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travel adventure promo
But when Mr Lowres felt he wasn't quite ready to retire, the developer started looking for development opportunities and stumbled across Naisoso Island, where you can buy land and build a house from $500,000.
A $400 million master-planned resort, which will have 150 beachfront apartments, a four and five-star hotel, wellness centre and marina, has been so popular with Australians it is being dubbed "the new Niseko".
"When I was growing up the family holiday was very much the beachside home," he said.
"Now many baby boomers are reaching retirement, they want to enjoy it and I don't think this generation likes to rough it."
Real estate agent Carol West, from The Professionals Fiji, said the number of Australians buying there had doubled in the past two years.
Most Australian buyers were baby boomers and retirees from the Gold Coast, Sydney and Melbourne and a few from Adelaide and Noosa.
Ms West said people were realising how far their dollar could go there and that there were four airlines linking the countries.
"You can buy a property on Denarau for around $400,000 and the competition between the airlines drives the price of flights down," she said.
"People are realising they can get on a plane and be here in a few hours and be in a different world."
Read more: http://www.news.com.au/travel/island-holiday-homes-beckon-for-aussies/story-e6frfq7r-1225908366418#ixzz0xPYCep00
http://www.news.com.au/travel/island-holiday-homes-beckon-for-aussies/story-e6frfq7r-1225908366418
Saturday, July 17, 2010
Bali Officials Say Most Condotels in Operating Illegally.
Is Bali being Conned by Condotels?
Bali Officials Say Most Condotels in Operating Illegally.
Radar Bali quoted the Head of Tourism for Badung, I Made Subawa, as saying there are "tens" of illegal Condotels operating without the required licenses and permits in his regency. Said Subawa: "There are around 30 or more condotels that are without operating licenses. This figure is based on the initial 'principal permits' issued for these project."
The principal permit is the initial permit to pursue an investment project. The Condotels in question are performing commercial operations without the sundry permits required under the law.
The Condotel mentioned by Radar Bali as lacking operational permits is the Bali Kuta Residence (BKR) on Jalan Majaphait which has been open for nearly an entire year. Reprimands and warnings have been issued by the Badung tourism office. A tourism official told the press that when BKR is asked for their operational permits, they freely admit that they are only in the process of organizing their trading license (SITU) and "free of local disturbance" (HO) permits, both of which should have been done before the building was constructed.
The management of the BKR fend off officials, claiming that those staying at the building are "only attending meetings." Such activities are nonetheless commercial in nature and, as such, violate the requirement to have completed the legalization process before commencing business. One Badung official warned: "If they do not soon complete their operational licenses, the operations of the BKR will be stopped.
Of the more than 30 condotels operating in Badung at this time, only 7 hold operational licenses.
The process to obtain an operating licenses for a new condotel is somewhat complicated. The process begins with obtaining a building permit (IMB). If the construction phase has reached 80% the owners are obliged to obtain a trading license (SITU) and a statement of "no disturbance" to the local environment/community (HO). Following this the zoning authority (Dinas Cipta Karya) must issue a building use permit.
In a separate report, members of the Badung House of Representatives (DPRD-Badung), are calling for the regency's enforcement agency (SATPOL PP) to close down all condotels found to be operating without the required licenses. Legislators are branding the local law enforcement procedures as being "toothless" in the face of the report of more than 30 illegally operating condotels in Bali.
© Bali Discovery Tours. Articles may be quoted and reproduced if attributed to http://www.balidiscovery.com. All images and graphics are copyright protected.
Bali Officials Say Most Condotels in Operating Illegally.
Radar Bali quoted the Head of Tourism for Badung, I Made Subawa, as saying there are "tens" of illegal Condotels operating without the required licenses and permits in his regency. Said Subawa: "There are around 30 or more condotels that are without operating licenses. This figure is based on the initial 'principal permits' issued for these project."
The principal permit is the initial permit to pursue an investment project. The Condotels in question are performing commercial operations without the sundry permits required under the law.
The Condotel mentioned by Radar Bali as lacking operational permits is the Bali Kuta Residence (BKR) on Jalan Majaphait which has been open for nearly an entire year. Reprimands and warnings have been issued by the Badung tourism office. A tourism official told the press that when BKR is asked for their operational permits, they freely admit that they are only in the process of organizing their trading license (SITU) and "free of local disturbance" (HO) permits, both of which should have been done before the building was constructed.
The management of the BKR fend off officials, claiming that those staying at the building are "only attending meetings." Such activities are nonetheless commercial in nature and, as such, violate the requirement to have completed the legalization process before commencing business. One Badung official warned: "If they do not soon complete their operational licenses, the operations of the BKR will be stopped.
Of the more than 30 condotels operating in Badung at this time, only 7 hold operational licenses.
The process to obtain an operating licenses for a new condotel is somewhat complicated. The process begins with obtaining a building permit (IMB). If the construction phase has reached 80% the owners are obliged to obtain a trading license (SITU) and a statement of "no disturbance" to the local environment/community (HO). Following this the zoning authority (Dinas Cipta Karya) must issue a building use permit.
In a separate report, members of the Badung House of Representatives (DPRD-Badung), are calling for the regency's enforcement agency (SATPOL PP) to close down all condotels found to be operating without the required licenses. Legislators are branding the local law enforcement procedures as being "toothless" in the face of the report of more than 30 illegally operating condotels in Bali.
© Bali Discovery Tours. Articles may be quoted and reproduced if attributed to http://www.balidiscovery.com. All images and graphics are copyright protected.
Friday, June 4, 2010
Indonesia Keeps Ban on Foreigners Buying Property
To Agents' Disappointment, Indonesia Keeps Ban on Foreigners Buying Property
By JON GORVETT
Published: June 3, 2010
http://www.nytimes.com/2010/06/04/greathomesanddestinations/04iht-reindo.html
JAKARTA — Hopes for a change in Indonesia’s restrictive rules on foreign ownership of property were dashed when a major conference of real estate agents on Bali ended last week without an expected government announcement.
“We all thought they were ready to go for it,” said Bagus Adikusumo, director of Colliers International Indonesia. “But then it didn’t happen.”
Only Indonesian citizens are allowed to hold freehold titles in this archipelago republic. And its Constitution limits ownership of land as well.
Foreigners wishing to buy property have had to make purchases through Indonesian proxies, or one of two types of limited lease.
The first is a 30-year renewable lease available to entirely foreign-owned companies; the second is a 25-year renewable “right of use” lease available to individual foreigners.
“The problem is that the second of these leases is not bankable — no bank will lend on a title that is so limited and difficult to change,” said Alwi Bagir Mulachela, secretary general of the Indonesian real estate association. “It’s also not clear what happens if the foreign owner dies — inheritance is not clear in these circumstances.”
The Indonesian government has been eager to increase foreign investment and not be left behind by countries like Cambodia and Vietnam, which have recently eased their foreign ownership laws.
At the conference held last week by the International Real Estate Federation, known as the F.I.A.B.C., agents had expected the government to announce that foreigners would be allowed to buy property with a minimum value of $150,000; to introduce a simplified, 70-year lease that could qualify for bank financing; and to clarify the right of foreigners to inherit.
“I think they backed off first for nationalistic reasons,” Mr. Adikusumo said, “then secondly, because of fears that opening up the market to foreigners would favor luxury house construction at the expense of low-cost mass housing. They will also have to make major changes in the law, even perhaps the Constitution, which would take quite a while to push through Parliament.”
There are some indications that changes may still occur.
“Limiting foreign ownership is no longer the right approach,” the country’s public housing minister, Suharso Monoarfa, said in his speech at the conference.
Mr. Mulachela, of the real estate association, said: “I’m confident we’ll get something by the end of the year. The government says it’s working on it and the Land Office says it is too, so we’re still hoping.”
By JON GORVETT
Published: June 3, 2010
http://www.nytimes.com/2010/06/04/greathomesanddestinations/04iht-reindo.html
JAKARTA — Hopes for a change in Indonesia’s restrictive rules on foreign ownership of property were dashed when a major conference of real estate agents on Bali ended last week without an expected government announcement.
“We all thought they were ready to go for it,” said Bagus Adikusumo, director of Colliers International Indonesia. “But then it didn’t happen.”
Only Indonesian citizens are allowed to hold freehold titles in this archipelago republic. And its Constitution limits ownership of land as well.
Foreigners wishing to buy property have had to make purchases through Indonesian proxies, or one of two types of limited lease.
The first is a 30-year renewable lease available to entirely foreign-owned companies; the second is a 25-year renewable “right of use” lease available to individual foreigners.
“The problem is that the second of these leases is not bankable — no bank will lend on a title that is so limited and difficult to change,” said Alwi Bagir Mulachela, secretary general of the Indonesian real estate association. “It’s also not clear what happens if the foreign owner dies — inheritance is not clear in these circumstances.”
The Indonesian government has been eager to increase foreign investment and not be left behind by countries like Cambodia and Vietnam, which have recently eased their foreign ownership laws.
At the conference held last week by the International Real Estate Federation, known as the F.I.A.B.C., agents had expected the government to announce that foreigners would be allowed to buy property with a minimum value of $150,000; to introduce a simplified, 70-year lease that could qualify for bank financing; and to clarify the right of foreigners to inherit.
“I think they backed off first for nationalistic reasons,” Mr. Adikusumo said, “then secondly, because of fears that opening up the market to foreigners would favor luxury house construction at the expense of low-cost mass housing. They will also have to make major changes in the law, even perhaps the Constitution, which would take quite a while to push through Parliament.”
There are some indications that changes may still occur.
“Limiting foreign ownership is no longer the right approach,” the country’s public housing minister, Suharso Monoarfa, said in his speech at the conference.
Mr. Mulachela, of the real estate association, said: “I’m confident we’ll get something by the end of the year. The government says it’s working on it and the Land Office says it is too, so we’re still hoping.”
Friday, May 7, 2010
Indonesia's Diluted Expatriate Property Rule Nearly Completed
The government has backpedaled on a proposal to allow foreigners to own property in Indonesia for 90 years and will now only simplify the extension process and not change the maximum length of title from the current 70-year tenure.
The changes are contained in a new regulation which will be presented to President Susilo Bambang Yudhoyono for approval before the end of May, the Ministry of Public Housing’s Jamil Ansari said on Wednesday. The regulation is expected to take effect within two months of the president approving it, he said.
“The draft review of the regulation is almost finished and we expect it will be ready by the end of May,” Jamil said.
Currently, foreigners can hold property for 25 years. After the term expires, they may renew their property rights with the National Land Agency (BPN) for an additional 25 years and then extend it once more for 20 years, making for a total of 70 years.
Under the new regulation, foreigners will be able to renew for the additional 25- and 20-year terms at the same time, effectively meaning they will be able to renew for 45 years.
“Many foreigners find that the extension process for their property is really unpractical. Therefore, we decided to simplify it,” Jamil said.
Teguh Satria, chairman of the Indonesian Real Estate Developers Association (REI), said it would make more sense for foreigners to be able to own property outright so they did not have to go through time-consuming extensions.
Not allowing foreigners to own property meant Indonesia’s property sector was less competitive compared to Singapore and Malaysia, Teguh said.
He said there were around 83,000 foreigners living in Indonesia. If 10,000 of those foreigners bought a $250,000 apartment it would translate into $2.5 billion of foreign investment, Teguh said.
The changes are contained in a new regulation which will be presented to President Susilo Bambang Yudhoyono for approval before the end of May, the Ministry of Public Housing’s Jamil Ansari said on Wednesday. The regulation is expected to take effect within two months of the president approving it, he said.
“The draft review of the regulation is almost finished and we expect it will be ready by the end of May,” Jamil said.
Currently, foreigners can hold property for 25 years. After the term expires, they may renew their property rights with the National Land Agency (BPN) for an additional 25 years and then extend it once more for 20 years, making for a total of 70 years.
Under the new regulation, foreigners will be able to renew for the additional 25- and 20-year terms at the same time, effectively meaning they will be able to renew for 45 years.
“Many foreigners find that the extension process for their property is really unpractical. Therefore, we decided to simplify it,” Jamil said.
Teguh Satria, chairman of the Indonesian Real Estate Developers Association (REI), said it would make more sense for foreigners to be able to own property outright so they did not have to go through time-consuming extensions.
Not allowing foreigners to own property meant Indonesia’s property sector was less competitive compared to Singapore and Malaysia, Teguh said.
He said there were around 83,000 foreigners living in Indonesia. If 10,000 of those foreigners bought a $250,000 apartment it would translate into $2.5 billion of foreign investment, Teguh said.
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