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In many instances, your sponsoring company will offer you options for living accommodation before you arrive in Indonesia.
Corporate relocation specialists will be keen to ensure that you are happy, as this bodes well for their long-term relationship with the company, their client.
However, if you decide to find your own place, it’s a good idea to start off renting rather than trying to buy. It was, until recently, illegal for foreigners to own property at all in Indonesia. It remains complex and subject to knotty regulation. Homes must be valued above a minimum price threshold and foreigners cannot own freehold land outright. Foreigners only have a ‘right of use’ to the apartment for a period of time that can be extended. Indonesian banks will usually not lend for this type of ownership. There are workarounds to enable you to own property in Indonesia, but you are advised to seek specific legal advice on buying property in Indonesia.
Rental is likely to be much easier and straightforward in the first instance. In particular, you may wish to start by living in a hotel or serviced apartment while you look for longer-term accommodation, and until any household goods that you are shipping over have arrived (since these can be held up by the various permits required by the Indonesian government).
As there is no centralised listing service, a reputable agent or broker will almost certainly be necessary if your relocation package doesn’t offer you assistance in finding housing.
Independent brokers are one way forward which may save you money up front (since they are paid commission by the owner of the house rather than by you, the tenant). However, independent brokers are likely to have small listings, which can mean a lengthy search. In addition, their commission is usually based on the rent secured, meaning they are incentivised to secure a higher rent, which is against your interests.
Franchised real estate brokers may resemble the agents in your home country, since they may have received some training from a multinational estate agency. Levels of professionalism do vary, however. Again, they will only be able to show you houses for which they have listings, but they will probably have more properties on their books than an independent broker.
Finally, you have the option of engaging a relocation specialist for a fee. These agents are paid by you to search the listings of various agencies, and so will work in your interests. Be sure to think carefully about your requirements in housing before engaging an agent, and try to gauge whether they are responsive to your particular needs.
More detailed information on using rental agents is available here.
The price of housing in Indonesia is one of the fastest growing in the world and despite COVID-19, this trend continued in 2020.
In our 2020 Global Housing Market Trends report, we analysed rental and purchase data from 2015 to mid-2020. The metrics used were:
- Price-to-rent ratio — the average cost of ownership divided by estimated rental cost. Higher values suggest that it is better to rent rather than buy
- Price-to-income — a ratio of apartment prices to average disposable income. Lower values mean more affordable housing
- Mortgage as a percentage of income — a ratio of mortgage costs to take-home family income. Lower values mean more affordable housing.
While the rental market in Indonesia followed its pre-pandemic trend, the purchase market has seen a notable deviation from predictions and have dramatically risen since 2019. Mortgage as a percentage of income rose by 58.9% between mid-2019 and mid-2020 — and price-to-income ratio increased by 41.3%. This has made housing far less affordable for the average family during the COVID-19 pandemic.
Unlike most countries, which have experienced one or more spikes in COVID-19 infections, Indonesia has seen a steady build of cases since the pandemic’s onset. The nation was criticised for its poor handling of the virus in its early months and reports have shown that the Indonesian economy is in recession. It is possible that as Indonesia struggles to find stability, these dramatic changes in housing affordability are part of the fallout.
Rents vary widely, depending on your expected standard of living, how many rooms you need, and the desirability of the area you choose. If you have children and staff, and will be expected to entertain oil company executives, you will need a more expensive house than a single worker for a development charity. Rents are usually discussed in USD per month.
A two-bedroom apartment in central Jakarta can go for anything from $1500 a month to $4500 a month, depending on exact location, condition, whether it is furnished or not, and overall size.
A large house in South Jakarta, marketed as being suitable for embassy staff (four bedrooms with swimming pool, brand new condition) and with proximity to international schools, would be on the market for around $9000/month, while a smaller, brand new four-bedroom house with pool in the less-desirable North Jakarta can go for half that amount.
The rental market in Indonesia is unusual in that landlords often require that all rent be paid up front, usually for a minimum of one year, but up to three years in advance. Utilities and phone are not included in the rent, and additional fees include booking fees, security deposit, and a deposit for use of a phone line. Electricity supply is not always guaranteed to be sufficient to power the various devices and appliances you may take for granted, so check this before signing anything. Similarly, not all houses have landlines for telephones, and you must be happy with the phone situation before you sign anything. The tenant usually pays for minor maintenance. Be sure to organise an independent audit and deal with any upgrades or problems before you pay or move in since you will have little leverage after paying all your rent up front.
Rents are fixed for the term of the lease, after which the rent can increase. Subletting during the lease term is at the discretion of the landlord.
Be aware that you are likely to be able to hear the call to prayer from the local mosque at least five times a day — the distance to the mosque and the direction of the speakers will make a difference to how loud this is inside your home.
If you are staying in a private residence (not a hotel) you’re required to register with the local police and the local Rukun Tetangga when you arrive.
For a full guide to buying property in Indonesia see this helpful guide.
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