Residential Real Estate - Indonesia

The Residential Real Estate market market in Indonesia is projected to reach a value of US$7.85tn by 2024.
It is expected to exhibit an annual growth rate of 1.23% from 2024 to 2029, leading to a market volume of US$8.35tn by 2029.
In comparison to other countries, China is anticipated to generate the highest value in the Real Estate market, with a projected worth of US$112.9tn in 2024.
The demand for luxury residential properties in Indonesia is witnessing a significant surge due to the country's growing affluent class.

Definition:

The residential real estate market covers the leases and transactions of residential properties. Residential real estate leases refer to the market where landlords and tenants enter into agreements for the rental of residential properties, such as apartments, houses, and condominiums, while residential real can be defined as buying, selling, or transfer of ownership of residential properties.

Structure:

The residential real estate market covers real estate transactions and leases, and the section, residential real estate leases, is divided into apartment and house leases.

Additional information:

The market contains the following KPIs: real estate value aggregated for all countries and regions, average real estate value, real estate transaction revenue, number of real estate sold, number of leased and owned real estate, average room per resident, and dwelling type shares. The dwelling type shares comprise the share of the population that lives in houses and apartments. These shares are displayed for real estate owners and for real estate renters as well.

Residential real estate transactions
Residential real estate leases

Real estate agencies
Construction companies
Accommodation services, such as Airbnb
Commercial real estate leases and transactions
Publicly owned buildings used by the local government
Buildings used for public health care services

The Residential Real Estate market in Indonesia has been experiencing significant growth in recent years.

Customer preferences: Indonesian customers have shown a strong preference for residential properties, particularly in urban areas. This can be attributed to the increasing urbanization in the country, with more people moving to cities in search of better job opportunities and a higher standard of living. Additionally, there is a growing middle class in Indonesia that has the financial means to invest in residential properties. These customers are often looking for modern and well-designed homes with amenities such as swimming pools, gyms, and green spaces.

Trends in the market: One of the key trends in the Indonesian residential real estate market is the development of integrated townships. These townships offer a mix of residential, commercial, and recreational facilities, creating self-contained communities. This trend is driven by the desire for convenience and a holistic lifestyle among customers. Integrated townships often include shopping malls, schools, hospitals, and other amenities, reducing the need for residents to travel long distances for their daily needs. Another trend in the market is the increasing popularity of high-rise condominiums. This is particularly evident in major cities such as Jakarta and Surabaya, where land availability is limited. High-rise condominiums offer a solution to the space constraints in these cities, providing vertical living options. These properties often come with modern facilities and are located in prime areas, making them attractive to both investors and end-users.

Local special circumstances: Indonesia's archipelagic geography presents unique challenges and opportunities in the residential real estate market. The country consists of thousands of islands, each with its own property market dynamics. While the major cities like Jakarta and Surabaya have a high demand for residential properties, the market in smaller cities and rural areas may be less developed. Infrastructure development and connectivity play a crucial role in attracting investment and driving growth in these areas.

Underlying macroeconomic factors: Indonesia's strong economic growth and stable political environment have contributed to the development of the residential real estate market. The country has experienced a steady increase in GDP and per capita income, leading to a rise in purchasing power. Additionally, low interest rates and favorable government policies have made it easier for individuals to access mortgage financing, further stimulating demand for residential properties. In conclusion, the residential real estate market in Indonesia is experiencing growth due to customer preferences for urban living, the development of integrated townships, and the popularity of high-rise condominiums. The country's unique geography and underlying macroeconomic factors also play a significant role in shaping the market dynamics. With continued economic growth and infrastructure development, the residential real estate market in Indonesia is expected to further expand in the coming years.

Data coverage:

Figures are based on total and average value of residential real estate, residential estate transactions and leases.

Modeling approach:

Market size is determined by a combined top-down and bottom-up approach. We use national statistics, international organizations, and industry associations to analyze the markets. To estimate the market size for each country individually, we use relevant key market indicators and data from country specific industry associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita.

Forecasts:

We use a variety of forecasting techniques, depending on the behavior of the market, for instance, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

Data is modeled using current exchange rates. The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

The global housing market has slowed amid high inflation and soaring borrowing costs. Homeownership is one of the most universal signs of success and prosperity: It serves both as a source of stable and secure housing and a long-term investment. After the global financial crisis, property prices rose in many countries and especially in advanced economies. For more than a decade after that, the housing market has been on an upward trajectory, culminating in the housing boom during the COVID-19 pandemic. However, housing shortages in highly competitive markets, the recent rapid house price growth, soaring inflation, and consequently, some of the highest mortgage interest rates recorded in the past 10 years have led to the market cooling.

Soaring inflation and aggressive mortgage interest rate hikes cooled the European housing market after a nearly decade-long period of growth. Since 2015, house prices in the European Union have grown by about 50 percent. When inflation in Europe started to rise at an alarming rate in 2021, the European Central Bank increased interest rates, resulting in substantially higher mortgage interest rates and a decline in homebuying. But how important is homeownership for Europeans?

Generally considered the third key pillar of the food, clothing, and shelter trinity popularized in India over generations, owning a home is still prioritized as a measure of financial security by a vast majority of the Indian population. The COVID-19 pandemic with its successive lockdowns and restrictions to stay within the confines of one’s home, further reinforced this vision. India’s growing urban population, rising household incomes, and decade-long low-interest rates have been propelling the demand for residential units, driving up the sales volume. Even though the residential real estate sector was severely hit in 2020, it marked a strong recovery in consecutive years, crossing pre-COVID sales figures.

Residential Real Estate - Indonesia

Value

Volume

Analyst Opinion

Transaction Value

Revenue

Household Type

Real Estate Type

Living Space

Methodology

Financial

Access more Market Insights on Financial topics with our featured report

Key Market Indicators

Explore more high-quality data on related topic

Global housing market - statistics & facts

Explore more high-quality data on related topic

Residential real estate in Europe - statistics & facts

Explore more high-quality data on related topic

Residential real estate in India - statistics and facts

Contact

Get in touch with us. We are happy to help.

Residential Real Estate - Indonesia

In-Scope

Out-Of-Scope

Related markets:

Residential Real Estate: market data & analysis

Financial

Access more Market Insights on Financial topics with our featured report

Explore more high-quality data on related topic

Global housing market - statistics & facts

Explore more high-quality data on related topic

Residential real estate in Europe - statistics & facts

Explore more high-quality data on related topic

Residential real estate in India - statistics and facts