What to expect in Indonesia's expat housing market post-COVID

The pandemic has caused residential vacancies to rise as companies cancel their expatriate housing contracts.

According to Lenny van Es-Sinaga, Head of Residential Services of Colliers International Indonesia, due to the pandemic, it is a tenants’ market in the residential sector where landlords or owners need to be more flexible with companies or tenants’ wish lists. "Other than shortened lease terms, landlords or owners should also become more flexible with payment terms. Tenants are allowed to add revisions to the applicable contract, whereas if this situation is about to occur again and is beyond our control, such as force majeure, the owner must return the remaining valid lease period.”

Here's more from Colliers:

Vacant Property

What can we expect in the short-term due to the vacancies caused by tenants not occupying properties?

• The renewal process will have a few changes because the lease term will be shorter, the landlords or owners can be more flexible regarding this.
• Tenants must agree to have virtual inspections with consultants or landlords or owners if physical inspections are not agreed to.
• More expatriate tenants are releasing the property they live in. This is due to the uncertainty of when they can return to Indonesia.

Usage of Smart Technology 

The use of technology, whether at landed houses or in an apartment, is intended to help and make it easier for tenants who occupy the property. Anything that potentially save electricity and money would be beneficial. Another feature that would be helpful is the assistance in looking for things online that people have been forced to do over the last few months, where it could be continuing after the pandemic has passed.

What’s next in the expatriate housing market?

• In order to keep properties occupied and anticipate future vacancies, landlords will need to adjust their market focus to Indonesian national/local markets like businessmen/professionals with daily or monthly terms.
• To attract the local market, it is better if landlords or owners can provide additional services such as daily housekeeping/maid service with the rental price including utilities and market their property online to attract a wider market.
• The current rental price should no longer be based on US dollar but based on Rupiah.
• It is unlikely that the expat market that was already dwindling pre-COVID-19 will return in the near future. It is possible this won’t occur until next year. The unstable economy as it is today will have a "domino effect", especially on a company's confidence to bring its expatriates to Indonesia.

However, if the economic situation can improve and the handling of COVID-19 is more stable, it is hoped that business movements will also rotate better, so that companies will invest in Indonesia and bring some of their expatriates into the country, which can also revive the expatriate housing market.\

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