Your Guide to the Best Cities for Real Estate Investment in Indonesia

Explore Indonesia’s top cities for real estate investment

Indonesia’s property market has emerged as one of the most dynamic in Southeast Asia, attracting both local and international investors. With rapid urban development, a growing population, and supportive government policies, the country offers fertile ground for real estate opportunities.

Understanding which cities hold the greatest potential is essential for anyone looking to enter the market. This article explores the trends shaping Indonesia’s real estate sector, explains why investors should pay attention, and highlights the top five cities that promise the strongest returns.

Indonesia’s Real Estate Market Outlook

By 2025, the Indonesian property sector is projected to reach a market value of USD 68.5 billion, with further growth expected up to USD 90.6 billion by 2030. This steady expansion, supported by a CAGR of 5.8%, contributes significantly to the country’s GDP nearly USD 31 billion annually. The main drivers of this growth include a rising urban population, an expanding middle class, and large-scale infrastructure projects that are reshaping connectivity across the archipelago.

The residential property segment continues to dominate the market with more than half of the overall share, boosted by government housing programs targeting millions of new units. However, commercial spaces, hospitality properties, and industrial real estate also show strong performance, reflecting the diverse opportunities available for investors.

Why Indonesia Attracts Real Estate Investors

Several factors explain why Indonesia is quickly becoming a favorite destination for property investment:

1. Robust economic growth and housing demand

As Southeast Asia’s largest economy, Indonesia continues to see strong demand for residential and commercial properties, particularly in urban centers.

2. Competitive property prices

Compared to other Asian markets, Indonesia offers relatively affordable property values while still maintaining attractive rental yields, often ranging between 6% and 12% in prime locations.

3. Strategic geographic position

Located between the Indian and Pacific Oceans, Indonesia plays a key role in international trade routes, enhancing business activities and foreign interest in its major cities.

4. Supportive government initiatives

Policies such as the Omnibus Law and housing subsidies have improved the investment climate, signaling long-term government commitment.

5. Strong tourism appeal

With world-famous destinations like Bali, Candi Borobudur, and Labuan Bajo, the tourism industry drives demand for vacation rentals, villas, and hospitality assets.

Key Trends Shaping the Future

Looking ahead, several trends are expected to influence Indonesia’s property landscape. Sustainability is becoming increasingly important, with eco-friendly buildings and green certifications gaining traction among both investors and buyers. The boom in e-commerce has also accelerated demand for logistics hubs and industrial parks, particularly near ports and airports.

Meanwhile, the rise of remote work is fueling new interest in long-stay rentals, especially in Bali and Yogyakarta, as digital nomads look for well-designed living spaces and co-living communities. Additionally, ongoing infrastructure projects from toll roads to new airports are opening up fresh investment opportunities beyond the country’s biggest cities.

Property Ownership for Foreigners

Foreign investors are allowed to buy property in Indonesia under certain regulations. While freehold ownership is not available, there are several legal pathways such as Hak Pakai (Right to Use), Hak Guna Bangunan (Right to Build), long-term lease agreements, or investment through a PT PMA (foreign-owned company).

Recent regulations have made the process even more accessible. As of April 2024, foreigners can purchase property with only a passport, provided they meet specific requirements on property value and land size. For instance, the minimum purchase price in Jakarta and Bali is set at IDR 5 billion, while in other provinces it can be as low as IDR 1 billion.

5 Best Cities for Real Estate Investment in Indonesia

With such a wide range of opportunities, location becomes the most critical factor in determining success. Here are five cities where real estate investment has shown consistent growth and long-term potential:

1. Jakarta

As the capital and Indonesia’s largest city, Jakarta remains the country’s primary business hub. Home to major corporations, financial institutions, and government offices, it naturally attracts both local and foreign professionals. Central and South Jakarta are particularly sought-after for their vibrant commercial districts and established residential areas.

With the expansion of the MRT and ongoing infrastructure projects, accessibility continues to improve, reinforcing Jakarta’s position as a top destination for property investors. Rental demand, especially among expatriates and business travelers, ensures stable returns in this metropolitan market.

2. Bali

Bali’s reputation as a global tourist paradise makes it one of the most lucrative property markets in Indonesia. Villas, resorts, and vacation rentals are consistently in demand due to high tourist arrivals and the increasing number of digital nomads choosing the island for long-term stays.

Areas such as Canggu, Seminyak, and Ubud have transformed into hotspots for both leisure and investment, offering impressive rental yields. Beyond short-term rentals, the island’s evolving co-living and remote-work culture adds another layer of opportunity for investors looking to diversify.

3. Surabaya

Located in East Java, Surabaya is Indonesia’s second-largest city and a major center of trade and industry. Known as a gateway to eastern Indonesia, it offers a growing middle-class population eager for modern housing options.

Property prices here are generally more affordable compared to Jakarta, yet demand for residential and commercial spaces continues to rise. Surabaya’s rapid urban development, coupled with new transportation infrastructure, makes it an increasingly attractive alternative for investors seeking both capital appreciation and rental income.

4. Bandung

Bandung is famous for its cool climate, creative industries, and status as a university city. It has become a favorite among young professionals, students, and even weekend tourists from Jakarta. The introduction of the Jakarta–Bandung high-speed rail has significantly improved connectivity, strengthening the city’s real estate appeal.

Investors will find opportunities across condominiums, townhouses, and hospitality properties, catering to both local demand and domestic tourism. Bandung’s youthful and dynamic atmosphere makes it a promising city for long-term property growth.

5. Yogyakarta

Renowned for its cultural heritage and vibrant academic scene, Yogyakarta presents a unique blend of tradition and modernity. The city is a magnet for both domestic tourists and international visitors who come to explore its temples, arts, and local hospitality.

Its large student population fuels demand for rental housing, while the tourism industry supports steady growth in hotels, guesthouses, and serviced apartments. For investors, Yogyakarta represents a market where cultural richness translates into consistent real estate opportunities.

While Indonesia’s property market offers exciting prospects for long-term investors, many expatriates prefer the flexibility of rental living when they first arrive. Renting provides the freedom to explore different neighborhoods, adapt to new lifestyles, and avoid the complexity of property ownership. This is where Rukita becomes an ideal solution making it easier for expats to find fully furnished rental homes in prime locations across Indonesia.

Why Expats Should Consider Rukita

For expatriates exploring the Indonesian property market, finding a comfortable and convenient place to live is often the first step. This is where Rukita comes in.

As Indonesia’s leading co-living and rental platform, Rukita offers fully furnished rooms and apartments in prime locations across major cities, including Jakarta, Bali, Surabaya, Bandung, and Yogyakarta. With modern amenities, flexible rental options, and vibrant community events, Rukita provides not just a place to stay but a lifestyle that helps expats feel at home from day one.

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From exploring investment opportunities to enjoying everyday life, expats in Indonesia deserve a home that offers comfort and flexibility. With fully furnished rentals in prime locations, Rukita makes it simple to start your journey and feel at home right away.

Want to find a comfortable, modern, and strategically located apartment to stay in? Rukita offers many kinds of apartments that you can rent to live a more comfortable life.

Don’t forget to download Rukita app via Google Play Store or App Store or visit www.rukita.co. Follow Rukita’s Instagram account @rukita_indo, X account @rukita_id, and TikTok account @rukita_id to get the most recent information and other interesting deals!