Property Prices in Indonesia

[Balifrog]

One reason property for foreigners should trade cheap is all the legal risk hanging above your head. You dont really "own" the place.
Next comitting.on a 25 or 30 y lease in this kind of countries is a big gamble.... Who can know what will happen in even 10 years ?
Not a worry for me, at 65 and retirement visa, rental is the way to go IMO.
For people married with a local, of course the thinking may be completely different.
I live in a new (2 y) property, I can already see the wear and tear (mainly due to substandard construction) and as zilch is being done on maintenance, I can easily see how it will look in 5 years....

 

[snpark]

Don't forget not just the risk of ownership but even the risk and uncertainty of legal status here, residence etc, we could all get kicked out tomorrow, better to have $300,000 in the bank getting 8% a year and use that to pay rent and be able to leave tomorrow than to have $300,000 "invested" in an apartment here which you won't be able to get $30,000 a year rent for, which likely won't appreciate a huge amount in value (market??) and which you could theoretically lose overnight depending on the whim of who is in charge here. Just my humble opinion

It's a renters market these days. Certainly not a time or place that I am looking to be investing in purchasing anything here. For many reasons plus those above

 

[Davita]

Don't forget not just the risk of ownership but even the risk and uncertainty of legal status here, residence etc, we could all get kicked out tomorrow, better to have $300,000 in the bank getting 8% a year and use that to pay rent and be able to leave tomorrow than to have $300,000 "invested" in an apartment here which you won't be able to get $30,000 a year rent for, which likely won't appreciate a huge amount in value (market??) and which you could theoretically lose overnight depending on the whim of who is in charge here. Just my humble opinion

It's a renters market these days. Certainly not a time or place that I am looking to be investing in purchasing anything here. For many reasons plus those above

Please tell me where I can get 8% on USA $.

 

[R Cameron]

Please tell me where I can get 8% on USA $.

Many people use 7% for expected long term return in the US stock market. Here's one person's explanation: https://www.thesimpledollar.com/where-does-7-come-from-when-it-comes-to-long-term-stock-returns/ (Obviously no future is guaranteed.)

But 8% "in the bank"? Yeah, definitely not in any USD account. Maybe in IDR or some other currency, but the reason those rates are higher is because the currency is less stable. The currency might stay stable while you gain 8%, but it may be just as likely to lose 10% of it's value (purchasing power) and you come out as with a net loss.

But I definitely still agree with snpark's point, with all the buy vs. rent prices I've seen, and the other economic complications, I am very happy to keep renting!

 

[snpark]

Please tell me where I can get 8% on USA $.

This has been discussed in other posts and threads already if you search

 

[snpark]

I used $300,000 as an example for this post, it wasn't a specific exact figure about $300,000 or the currency or the exact rate but yes I get 8.75% on hsbc bonds here in Indonesia (before tax, but I have an NPWP also) which originally was USD but it got converted into IDR at the time when it was 14045 rp and the Government bonds are in IDR yes

But there are many banks and bonds even in US$ that can get you 5 or 6% if you hunt around

My example was just to say that better to keep the lump sum cash in the bank, use the interest to pay your rent, keep your capital safe rather than the european model of using the lump sum to buy a property and rent it out etc etc because here the rental market sucks for the rentee, capital appreciation is hhhmmm slow, for the renter it is perfect, great apartments getting cheaper every month, and the legalise here of ownership, status, residence etc

Financially my example still makes sense, perhaps I should have clarified that the $300,000 example was in local currency (at the moment idr usd is about 14200 I think? )

 

[snpark]

Below is an exampe of the emails I get from my HSBC RM about investing my USD and IDR into local government bonds (which yes of course must be in IDR) which pay above 8% (or did) and pay out a 1/4ly or 1/2ly dividend with capital guaranteed plus the uplift in the bond price when you sell on the maturity date
Again this is a personal illustration for me, because I bank with them and because of my relationship with them and what I invested already, so maybe not everyone would have got that, or maybe some get more

Finance and investment is my career and business for 30 years, offshore and domestically. So while I do not profess to be a Warren Buffett, I do know mostly what I am talking about. I have properties in Dubai (not recommended) and Asia but I would not recommend to buy anything here except lower class housing which you can churn and burn, example build a kos kostan or buy a cr4ppy unit 1bed in example Kalibata (no offence) - if you are serious about investing here long term and have security vis-a-vis residence and ownership

Certainly my example of having $300,000 cash I would prefer to keep that liquid in the bank and rent a place then to spend $300k on a mid class 3 bed apartment in say Bellagio, when you can rent one for $1500 a month (using your bank interest) and still have change

Thats the point I was trying to make anyway


1. First recommendation for you is actually SR007, so the product is similar to ORI you will get monthly coupons with 8.25% ( still better than your current TMD ). Plus! the bond price is cheaper.
you buy at 100.60%,

2. Second is ORI 11, the price is currently 101.6% so much higher deduction, only 0.25% difference with SR007.

 

[Davita]

I used $300,000 as an example for this post, it wasn't a specific exact figure about $300,000 or the currency or the exact rate but yes I get 8.75% on hsbc bonds here in Indonesia (before tax, but I have an NPWP also) which originally was USD but it got converted into IDR at the time when it was 14045 rp and the Government bonds are in IDR yes

But there are many banks and bonds even in US$ that can get you 5 or 6% if you hunt around

My example was just to say that better to keep the lump sum cash in the bank, use the interest to pay your rent, keep your capital safe rather than the european model of using the lump sum to buy a property and rent it out etc etc because here the rental market sucks for the rentee, capital appreciation is hhhmmm slow, for the renter it is perfect, great apartments getting cheaper every month, and the legalise here of ownership, status, residence etc

Financially my example still makes sense, perhaps I should have clarified that the $300,000 example was in local currency (at the moment idr usd is about 14200 I think? )

Thanks Snpark...I see you meant you can get 8% in IDR and not in USD..... so I misread what you said in post # 122

I have similar investments in IDR but I'd like to find a better return on diversifying in USD and would be interested where you can get 5-6% from any bank/bond in USD...I cannot find anything like that.

 

[snpark]

Yeh sorry when I said $300,000 that was an example of the amount rather than indicitive of a rate for USD

I meant rather than spend $300,000 I would rather keep it in the bank (in IDR if necessary especially now) and get a good bank rate for fixed term deposit than blow it on investing in property here

You can get 5-6% for bonds in USD with offshore mutual fund companies, but within Indonesia, not sure what you can get domestically since each bank offers each client better deals depending on who you are, amount, etc etc which is SOP

 

[brian@bekasi]

I meant rather than spend $300,000 I would rather keep it in the bank (in IDR if necessary especially now) and get a good bank rate for fixed term deposit than blow it on investing in property here

I would totally agree with you about keeping money invested in investment opportunities offered by the Indonesian banks. I do and get good returns within the guaranteed limits. However, I am concerned at present about the exchange rate and buying power for holidays overseas.

I would never investment in a rental and/or high rise here. Poor quality and poor rate of return.

There are opportunities however to buy land at very reasonable prices and sit on it for a few years as you would do in any other country.

This way you can diversify and mitigate financial market risk to an extent.

My wifes small property portfolio has land and a small commercial property which we redeveloped. That way we ensure that all "eggs are not in one basket"

 

[Daniel50]

Finance and investment is my career and business for 30 years, offshore and domestically. So while I do not profess to be a Warren Buffett, I do know mostly what I am talking about.

Well keep up the good work and one day....I "may".......I underscore may let you glance at my portfolio......even though a glance is about all it should take.

 

[snpark]

Well keep up the good work and one day....I "may".......I underscore may let you glance at my portfolio......even though a glance is about all it should take.

I am semi retarded now so well I appreciate the "offer" I prefer to just focus on losing my own money and not yours ;-)

 

[steveandpenny]

This is a unless conversation because as a expat I can not buy property here in Indonesia. So I don't see the point of this thread.

 

[Daniel50]

This is a unless conversation because as a expat I can not buy property here in Indonesia. So I don't see the point of this thread.

I initially posted as property prices in Indonesia generally seemed too high to me, given the salary levels etc. and I could not understand them. It appears prices have stalled, or gone down, for now. I was thinking of buying a place prior. We have checked out different locations and Bali was not really on the list. Now it appears Bali is where we will be moving. I/we like the Sanur area. I like some nature and services and like the beach path there. We will be buying a house as we also like having a neigborhood we can settle in and know where the services are etc.. (this has all been an ongoing process for us). We may be 2 years off from moving there, three at the most. There are different ways we can have a property but I won't get into all the possibilities as there are other threads where all these have been discussed thoroughly and continue to be discussed.

So, it was a general discussion of property prices not the specifics of property ownership by WNI, WNA or whatever combinations of these.

 

[steveandpenny]

I initially posted as property prices in Indonesia generally seemed too high to me, given the salary levels etc. and I could not understand them. It appears prices have stalled, or gone down, for now. I was thinking of buying a place prior. We have checked out different locations and Bali was not really on the list. Now it appears Bali is where we will be moving. I/we like the Sanur area. I like some nature and services and like the beach path there. We will be buying a house as we also like having a neigborhood we can settle in and know where the services are etc.. (this has all been an ongoing process for us). We may be 2 years off from moving there, three at the most. There are different ways we can have a property but I won't get into all the possibilities as there are other threads where all these have been discussed thoroughly and continue to be discussed.

So, it was a general discussion of property prices not the specifics of property ownership by WNI, WNA or whatever combinations of these.

Sorry if I seemed rude, it's just one of those days...one of the reason this also doesn't effect us is that we live in north sulawesi where the prices are so much lower then Bali or Jakarta. We also don't live in manado but in a village, agin makes the rents even lower. I'm always shocked seeing the prices in Bali or jakarta when you talk of 100 million a year where we talk more like 15 million a year.
I know we are lucky and it's not for everyone. So any way I'm sorry if I was snarky

 

[Jaime C]

I am semi retarded now so well I appreciate the "offer" I prefer to just focus on losing my own money and not yours ;-)

I had thought as much, but hate to cast stones.

 

[snpark]

I had thought as much, but hate to cast stones.

Fred is our resident Financial Advisor

 

[scouser59]

Sorry if I seemed rude, it's just one of those days...one of the reason this also doesn't effect us is that we live in north sulawesi where the prices are so much lower then Bali or Jakarta. We also don't live in manado but in a village, agin makes the rents even lower. I'm always shocked seeing the prices in Bali or jakarta when you talk of 100 million a year where we talk more like 15 million a year.
I know we are lucky and it's not for everyone. So any way I'm sorry if I was snarky

15 juta, you can find prices like that in bali also, fyi

 

[Daniel50]

15 juta, you can find prices like that in bali also, fyi

15 juta we will be on the plane tomorrow.........I had better talk to Fred, my financial advisor, first.

 

[scouser59]

15 juta we will be on the plane tomorrow.........I had better talk to Fred, my financial advisor, first.

If you want a normal house in a quiet area , its achievable . Of course if you want a monster cliff top villa then of course you will need "big bucks" .