Everything you must know about Jakarta’s premium apartment market | Real Estate Asia
, Indonesia

Everything you must know about Jakarta’s premium apartment market

There was strong demand between 2017 to 2019, a supply correction occurred in 2021 and 2023.

In a recent report, Savills revealed that Jakarta accounts for the largest share of the apartment market in Indonesia, representing about 41.2% of the country’s total stock. Premium and Upper luxury apartments in the Jakarta market account for approximately 17.5% of total stock in the city.

“The combination of its strategic location, capable infrastructure and wealthy population as well as the presence of corporate professionals has further strengthened Jakarta’s position as a major luxury residential investment target,” the report said.

Here’s more from Savills:

The average price of a premium apartment unit is recorded at ≥IDR45 million per sq m. Premium apartments are defined as high-grade residential properties with a minimum unit size of 100 to 200 sq m and offer a wide range of amenities and services. These properties are typically located in Jakarta’s Central Business District (CBD), especially those which appeal to the expatriate market.

The amenities provided are diverse, including lush gardens, sports facilities with a wide range of equipment and studios, an Olympic-sized swimming pool, spa and sauna, karaoke or mini cinema, high-security systems, advanced air filtration systems, valet services, and more.

A developer’s reputation plays a crucial role in this market, as buyers prefer properties developed by companies with established expertise in the premium segment, because selling premium apartments is not just about the unit or the building itself but also involves delivering exceptional experiences, including top-tier hospitality and services for residents. Several notable developers have successfully catered to this market, including Astra Land, Djarum Group, Indonesia Paradise Property Group, Intiland, among others.

In the midst of the very lukewarm performance of the overall apartment market, demand for premium segment apartments has increased, mainly thanks to newly launched projects located in the Jakarta CBD. Clarity on development progress, location, and rental targets which prioritize the expatriate market, as well as segmentation and product quality are advantages, leading to an increased interest in premium apartments. The demand profile includes government officials, company directors/top executives, expatriates, as well as investors who previously owned units in nearby premium apartments.

The premium apartment market experienced strong demand between 2017 and early 2019, driven by the completion of several notable projects. Developments such as La Vie All Suite, Verde Two, Pondok Indah Residence, and The Elements were among the key projects delivered during this period, catering to the growing interest in high-end residential properties. This timeframe also marked the launch of several significant projects including 57 Promenade which was introduced to the public in the third quarter of 2017, while BRANZ Mega Kuningan was announced in the first quarter of 2019.

The premium apartment market faced a significant slowdown during the COVID-19 pandemic. The pandemic caused considerable disruption in the property sector, particularly the premium segment. Buyers in this market shifted their preferences toward maintaining cash reserves instead of investing in property or other investment instruments.

Market data shows a correction in supply in 2021 and 2023. This was attributed to the cancellation of several premium apartment projects in CBD areas such as Gatot Subroto and Kuningan. These cancellations occurred because the projects failed to meet the required pre-sales thresholds during their launch periods in 2020 and 2022.

During the same period, the government introduced a policy of VAT exemption for ready-stock properties priced below IDR5 billion. This policy incentivized many investors and end-users to opt for such units, as they offered significantly lower prices and were move-in ready. Additionally, primary properties faced direct competition from the secondary market, making off-plan properties less attractive and harder to sell. This shift in market dynamics further pressured the premium apartment segment during the pandemic.

Furthermore, the relaxation of property ownership regulations for foreign nationals significantly boosted developer confidence. This policy enhancement expanded the potential buyer pool, particularly for premium properties, and contributed to the improved absorption rate of new projects. These factors have collectively revitalized the premium apartment market, restoring momentum within the sector.

The average growth in premium apartment prices over the past seven years was recorded at 1.9%. Price movements in 2018 and 2019 were considered to be the best, with an average increase of 4.0% per annum. However, there was a price correction in 2020 due to the pandemic, falling by 0.2%. After the pandemic, prices starting in 2021 have gradually increased.

Currently, the average price of a premium apartment is reported to be Rp50.9 million per sq m, an increase of 1.8% compared to last year. Price movements in 2024 were recorded as better after the pandemic.

In order to maintain apartment sales volumes, developers are making a number of attractive offers. Some of them are offering free furnishing vouchers or free furniture, additional discounts, reduced booking fees, free Environmental Management Fees (IPL), free golf membership, holding exhibitions, plus the existence of value added tax (PPN) incentives borne by the government.

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