The Indonesian government has revised its luxury goods tax policy (in Indonesia known as PPnBM) for (luxury) property. Previously, apartments with a selling price of at least IDR 10 billion (approx. USD $700,000) and houses with a selling price of at least IDR 20 billion (approx. USD $1.4 million) were subject to a 20 percent luxury goods tax. The latest revision has now raised the minimum price of the property to IDR 30 billion (approx. USD $2.1 million) for all types of property.
Update COVID-19 in Indonesia: 365,240 confirmed infections, 12,617 deaths (19 October 2020)
19 October 2020 (closed)
USD/IDR (14,738) +41.00 +0.28%
EUR/IDR (17,395) -10.41 -0.06%
Jakarta Composite Index (5,126.33) +22.92 +0.45%
Below is a list with tagged columns and company profiles.
Today's Headlines Property
Urban Jakarta Propertindo, a Jakarta-based property developer that focuses on the integration between property development and the availability of public transportation, will offer 600 million shares - equivalent to 16.85 percent of the company's total shares - to the public through an initial public offering (IPO) on the Indonesia Stock Exchange.
The local government of West Java said it is currently busy compiling all data related to the Lippo Group's ambitious Meikarta project. West Java Governor Ridwan Kamil said thorough investigation will then be done - based on the data - to decide whether the grand property project can resume or whether there are matters that need to be fixed.
Those who are searching for a luxurious house at a strategic location in the city of Yogyakarta should take a moment to look at this house. The buyer will also obtain all furniture that is visible in the pictures (including a very luxurious dining table). The location of the house is not far from Yogyakarta's Adisucipto Airport.
At the latest policy meeting (29/06) Bank Indonesia decided to relax the loan-to-value (LTV) and financing-to-value (FTV) ratios in the country's property sector (effective per 1 August 2018). By lowering down payment obligations for the consumer, the central bank aims to make it more attractive for consumers to purchase property using House Ownership Credit (Kredit Pemilikan Rumah, KPR), hence boosting overall credit growth as well as Indonesia's macroeconomic growth.
Dynamic Credit, a Netherlands-based innovative asset management and direct lending firm, is set to become a new player in Indonesia's mortgage industry. Through local subsidiary Dynamic Credit Asia it will sell mortgages to Indonesian consumers using funds from local institutional investors. Tonko Gast, CEO at Dynamic Credit, said Indonesia's rapidly growing middle class leads to a rising pool of retirement and insurance funds. However, the availability of fixed-income investments are limited in Southeast Asia's largest economy.
Astra International, one of Indonesia's largest diversified conglomerates, announced it will develop a luxurious residential apartment complex, called Arumaya, in South Jakarta in cooperation with Hongkong Land, a Hong Kong-based multinational property investment, management and development group. The complex is estimated to require investments worth IDR 1 trillion (approx. USD $75 million).
According to commercial real estate company Colliers International Indonesia, more expatriates are renting houses in Indonesia, specifically (South) Jakarta, since the second half of 2017. The rising number of expats who rent houses in Indonesia is due to expansion plans of manufacturing and automotive companies.
The property sector of Indonesia has been sluggish ever since the nation's property boom ended in late 2013. The same goes for the office space segment. Stagnant economic growth around 5 percent (y/y) since 2014 has led to limited growth of demand for office space in Indonesia. But for some this is a positive context. Coworking space - a shared working environment - is becoming increasingly popular.
There still seems no light to appear at the end of the tunnel for ceramic manufacturers in Indonesia. The ceramic industry is largely dependent on the property sector. However, as Indonesia's property sector growth has remained insignificant so far in 2017, there is few room for ceramic sales growth. Moreover, local ceramic producers have to compete with cheap imports from abroad.
Latest Columns Property
In its most recent report, the Asian Development Bank (ADB) forecasts Indonesia to continue its robust economic growth. Last year, the economy of Indonesia expanded 6.23 percent, and according to the ADB this figure will rise to 6.4 percent in 2013 and 6.6 percent in 2014. However, since the start of April there have been some issues that are causing Indonesia's stock indices to go down. Although believed to be only temporary, it is worth taking a closer look.
We had hoped for a continuation of the Indonesia Stock Exchange (IHSG)'s rebound after forming a green candle. It failed, however, due to negative market sentiments brought on by the bailout of Cyprus. Also, selling pressures on American stock markets late last week blocked a potential longer rally. The IHSG felt the impact of the Dow Jones Industrial Average (DJIA) that fell after a weaker NY Empire State Manufacturing Index as well as Consumer Sentiment.
On Tuesday's trading day, the Indonesia Stock Exchange (IHSG) was not able to maintain its record breaking upward movement. China's possible decision to limit credit growth in the property sector and the election in Italy contributed significantly to the decline of the IHSG. Moreover, it was influenced by poor openings of European stock markets. Investors thus decided to engage in profit taking, while waiting for further global developments.
The combination of the downgrade of Britain's government bond rating to AA1, China's plan to limit its property growth, and a decline in the HSBC Manufacturing PMI, was not able to block the growth of the Indonesia Stock Exchange (IHSG) today. In particular the purchase appetite of foreign investors made the index move to a new record high. Positive openings of European stock markets also provided a boost for the IHSG.
Both Indonesia's cement production and cement consumption have risen rapidly in recent years. As the country has been showing solid economic growth for a decade - and is forecast to continue this growth -, property and infrastructure projects have grown in number accordingly, thus increasing demand for building materials such as cement. Moreover, the government is committed to enhance the country's much-needed infrastructure development.
Associated businesses Property
- Ciputra Development
- Cowell Development
- Duta Anggada Realty
- Duta Pertiwi
- Gading Development
- Hanson International
- Holcim Indonesia
- Indocement Tunggal Prakarsa
- Intiland Development
- Kawasan Industri Jababeka