Newsletter

Indonesia

25 January 2016

Indonesia's property sales growth is expected to accelerate this year to 10-12 % this year and new amendments to ownership regulations could impact your situation! This month is filled with property news. Before we get into that we would like to take the time to wish you a happy and prosperous 2016! We hope to be at your service as we have continued to be in the last 10+ years. With that out of the way let’s get into the more interesting part: On Monday 18th of January, Eddy Hussy, the chairman of property industry group “Realestate Indonesia (REI), stated that Indonesia’s property sales growth is expected to accelerate to 10-12 % from 7-8 % last year. Hussy told reporters in Jakarta that the improvement in economic growth, the implementation of government stimulus packages, combined with infrastructure development will help rise sales the year.

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The main factor is the high possibility of decreasing interest rates in Indonesia during 2016. The positive liquidity caused the Indonesian banks in Indonesia to stop the policy of high interest rates. Only about December, banks will be very keen to offer high interest rates to meet the end-of-year incoming funds. That did not happen this year. This proves, banks have ample liquidity. The Bank of Indonesia also issued two policy strategies that are sure to have a positive influence in the property market. The first is the abolition of the regulation for multi level Loans To Value, for the first house, second house and more. As the reader may recall from our article last year (link above), this regulation is one of the major factors leading to the decrease of the property market in 2015. Now this regulation has been revoked. Gone for good. In consequence, domestic buyers will be encouraged and more active again.

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How do you know whether a renovation is a good investment? Well, our experience, statistics and research shows that... -when renovating a house, the basics are the most important. If you have a leaking roof, or broken drains, people will not likely be very interested in your house- not even when you have a beautiful kitchen and/or bathroom. Make sure the basics are fixed and solid! -you really need to consider the value you will receive from the project of renewal over any cost recovery that may be available from sale. Research local real estate guides to determine which projects are most likely to pay for themselves. In Bali, new home owners love a pool! Adding this to your villa project will dramatically increase the total worth of your property. -it pays to look at the area and its landscape, creating a unique garden atmosphere in a semi- concrete area will increase your worth like nobody’s business. Integrate beautiful architectural touches in your renewed living area (like adding a Javanese style ceiling) will give your villa the uniqueness and cozy atmosphere buyers might like. Be careful not to go overboard with wanting to be unique: if your house is too one of a kind it might be difficult to appeal to the general buyer’s market.

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Paying Property tax in Bali… do I really have to? In our chronicles of experiences with clients in our office, this one really needs some attention. It’s one that has a lot of mystical stories around itself, or is the always ‘forgotten’ duty that only matters when it’s too late. Especially as a foreigner living in Bali, you may not be aware of the different tax systems that are in place. You may have your ideas on how the islands are run, and somehow paying taxes never really crossed you mind. Or, what also happens is that people think that it’s ‘not really necessary’ as ‘they will never know’. However we find that in our office the clients that we educate on this matter are simply not aware of the taxation rules that apply when buying and selling a property. Another tax they are not aware of is the annual property tax.

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Have you seen our new look yet? Some of you may have already noticed that we have launched our new website last month! We felt it was time for a refreshing new site that will accommodate the modern internet user. It took us a couple of weeks to take out any bugs and other flaws that are common when you start a new project. We are now satisfied to say to the world: we are here and we are up to date As you can see it works perfectly on mobile phones and other mobile devices. It was time. Research shows that 60% of all internet use nowadays is done on other devices than the common desktop. That means that for us to be costumer friendly we needed to update our current website. Now we can accommodate all internet users, making it easy for everyone to browse through our listings and make appointments.

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