Indonesia to allow foreigners to own property

Photo credit: Yohanes Budiyanto

Indonesia is reportedly planning to allow foreigners to own properties. The move, which was announced by the country's president, is at the request of the country's developers.

The law currently bans foreign ownership of Indonesian real estate, but President Joko Widodo says that there will be an amendment to government regulation No. 41/1995.

"The president approved the request of national developer association (REI) to allow foreigners ownership in property sector," Teten Masduki, a member of the president's communication team, told the Xinhua News Agency.

The new laws, though, will carry a number of restrictions, including a priority for domestic citizens. Foreign investors will also only be allowed to own apartments.

Indonesian Finance Minister Bambang Brodjonegoro said that there also "must be [a] minimum price limit of properties that can be acquired by foreigners".

The announcement follows strong price growth in Jakarta's prime property market. The Indonesian capital led prime property price growth around the world in 2013, thanks to the country's strong economy. In Q4 2014, Jakarta saw the fourth biggest property price rise in the world (11.2 per cent year-on-year). The capital, meanwhile, was ranked 18th in Knight Frank's latest global house price index.