Indonesia opened the property market to those foreigners who reside (legally) in Indonesia. However, it also set tough requirements regarding foreign ownership of Indonesian property. Moreover, it remains nearly impossible for expats to obtain a local mortgage to finance the purchase of property. Although local credit may actually not be attractive for foreigners as interest rates are high in Indonesia, it is interesting to take a closer look at why Indonesian banks reject to sell mortgages to foreigners and whether foreigners are actually enticed to buy property in Indonesia?
Update COVID-19 in Indonesia: 64,958 confirmed infections, 3,241 deaths (6 July 2020)
6 July 2020 (closed)
USD/IDR (14,456) -91.01 -0.63%
EUR/IDR (16,356) -39.68 -0.24%
Jakarta Composite Index (4,988.87) +15.07 +0.30%
Richard van der Schaar is an academically-trained Indonesia expert with a decade-plus focus on - and experience in - the Indonesian economy and business (trade and investment). With comprehensive knowledge about Indonesia's investment climate and the 'way of doing business' in Indonesia (including the cultural aspects) as well as having a wide network to rely on, he guides and assists foreign investors in achieving their investment ambitions in Indonesia. The combination of having (1) academic expertise on Indonesian cultures, societies and histories, and (2) expertise on - and experience in - Indonesia's investment climate and business culture is a very valuable and complementary combination to achieve positive results.
He has been fascinated by Indonesian cultures and history since the very first time he stepped foot on Indonesian soil in mid-1998, just one month after Indonesia's second president, Suharto, was forced to step down from office at a time when the Asian Crisis ravaged through the country. He decided to do his Bachelor and Masters degrees in Southeast Asian Studies at Leiden University (the Netherlands) with a major focus on Indonesian society, history and linguistics.
After successfully finishing his MA degree he temporarily taught Indonesian languages and cultures at the Volksuniversiteit in Rotterdam (the Netherlands), while increasingly becoming aware of the economic potential of Indonesia in a world where the economic gravity point was rapidly shifting to the East. With having had a profound training in Indonesia's macroeconomic history at university, he started to delve into the contemporary economic conditions of the country and through frequent visits to Indonesia established a network within businesses and government circles.
Since 2013 he has been permanently based in Jakarta and is frequently contacted by international media to share his views on economic, political and social developments in Indonesia. Journalists can reach him through +62(0)8 788 410 6944 (including WhatsApp). He can also act as speaker at events or give presentations to boards/workers in companies.
"One of the most important aspects of doing business in Indonesia is to comprehend Indonesia's culture of business. It amazes me how often this cultural aspect is neglected when foreigners invest in Indonesia, but it is certainly critical to achieve success. Also in-depth knowledge about Indonesia's business and investment environments is critical when preparing an investment project here. This too is sometimes underestimated by investors. Even investment projects in Indonesia carried out by foreign governments (and supported by the local embassy in Jakarta) sometimes lack expertise on Indonesia, meaning future results will be far from optimal, while public money (usually tax money) is squandered."
|Private Investment Company|
|Expertise||Investment & Business Strategies | Investment & Business Environment | Macroeconomics & Politics | Cultural Studies|
Columns of R.M.A. van der Schaar
In the past two weeks, two of the big international credit rating agencies released new reports about Indonesia's fiscal situation. Both agencies affirmed Indonesia's sovereign debt rating: Fitch Ratings kept Indonesia at BBB-/stable (investment grade class) and Standard & Poor's (S&P) maintained Indonesia at BB+/positive (highest junk level, one notch below investment grade). S&P's decision to keep Indonesia within the junk level category was met with disappointment among investors and Indonesian government officials but perhaps not that surprisingly.
Indonesian assets weakened on Friday (06/11) on expectation that US non-farm payrolls and US employment data would improve, suggesting that a Fed Fund Rate hike may occur in December 2015. Such expectations were correct. After Indonesian and other Asian markets had closed on Friday, the US Labor Department announced that October payrolls rose 271,000 (the largest increase this year), while the US unemployment rate touched a seven-year low at 5 percent. Furthermore, the average hourly earnings over the past 12 months climbed by the most since 2009.
The residential property sector of Indonesia remains attractive in 2015 despite several factors having managed to slow growth over the past two years. In this column I discuss the factors that have slowed growth in Indonesia’s property sector and how Indonesian authorities (such as the central bank and Financial Services Authority) responded to these challenges through new regulations. Lastly, I provide an update on the recently announced plan of the Indonesian government to allow foreign ownership of luxurious apartments.
Both Indonesian stocks and the rupiah continued to slide on Thursday (04/06) and seem to be caught in a vicious downward spiral brought about by both domestic and international factors. Indonesia’s benchmark stock index (Jakarta Composite Index) fell 0.68 percent to close at a five-week low of 5,095.82 points, while the rupiah depreciated 0.39 percent to IDR 13,281 per US dollar (Bloomberg Dollar Index), a level last seen in the late 1990s when the country was plagued by the Asian Financial Crisis.