February 18, 2011
The Indonesia property market is set for a consecutive bullish year in 2011. Two important factors that will play a major role in real estate double digits growth this year are Indonesia’s promotion to investment grade status and real estate foreign ownership reform. These two drivers will ensure a strong and stable growth in Indonesia’s property market for years to come.
Achieving investment grade status means that Indonesia is recognized as a reliable and stable borrower of funds. Currently set at BB by S&P, Indonesia is just one step away to achieving investment grade status. Higher Foreign Direct Investment (FDI) and optimism from local corporates will boost economic activity and growth, which in turn will positively affect the local property market.
Relaxation of foreign ownership restriction on real estate in Indonesia has been intensely advocated by both local and foreign interest parties, such as REI and FIABCI. Comparing to other major cities in Asia, Jakarta property market is still undervalued, but with higher rental yields. A more relaxed foreign ownership lay will certainly boost the overall property market in Indonesia.
The CBD Jakarta market has also enjoying strong consecutive growth.
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