From The Jakarta Post
, 23 Nov. 2005Govt urged to allow foreigners to own apartments
Abdul KhalikThe Jakarta Post
A noted property analyst urged the government Wednesday to allow foreigners to buy and own apartments here in order boost property sales and economic activity in the country.
Panangian Simanungkalit of the Center of Indonesian Property Studies (CIPS) argued that allowing foreigners to own apartments would benefit the country's economy.
"I don't understand why the government does not allow foreigners to own apartments because other countries like Thailand and China have long allowed foreign ownership of apartments," he told a seminar on property on Wednesday.
Many foreigners who got married to Indonesians or simply wanted to retire in the country have long complained that they could not buy and own apartments or houses here.
Some of them have bought houses or apartments under their spouse's names, but problems could arise in the event that the marriage broke down, or the spouse died.
Panangian said that many foreign citizens have expressed interest in owning apartments in Jakarta, but current regulations prevent them from buying.
He gave an illustration that if only one percent of around five million foreign tourists and businesspeople who came to Indonesia every year bought apartments, the country could earn huge amount of money in the form of foreign exchange.
"One percent means 50,000 apartments. If one apartment costs, say, between Rp 1 billion and Rp 2 billion, then some Rp 100 trillion annually could be generated. This income will generate other economic activities in the form of apartment furniture and supplies," Panangian said.
He said foreigners who purchased apartments would help the property industry, which saw sales of between 70 to 75 percent of total supply this year.
According to Land Law No. 5 of 1960, foreigners are not allowed to own land in Indonesia.
Anisa Himawan, CEO of PT Mandiri Eka Abadi, which built the Pakubuwono Residence, agreed with Panangian, saying that a change in the regulations would help the country's employment problems as the Pakubuwono project alone employed over 4,000 workers.
"We hope the government allows foreigners to own apartments as other countries do. Thailand, for instance, has allowed ownership of buildings by foreign citizens for 70 years," she said.
Panangian also said that with the inflation rate expected to reach over 16 percent this year, investing in property would be seen as the safest as it bore low risk.
"With the current rate of inflation, I am sure that many foreigners would prefer to invest their money in property, rather than in other sectors," he said.