Indonesia Expat
Featured Observations

Unreal Estate: House Hunting Hazards

Property in Indonesia

Planning to stay awhile so looking to buy or rent? Don’t rush to cancel the temporary hotel stay just yet.

Sadly, the real estate business in Indonesia is all over the place, literally and metaphorically. Doubt me? Read on, then go wander around a district where you’d like to live.

There’s an apocryphal tale about newbies not wondering why their perfect find has been empty for so long. They’ve checked for leaks and security screens, distance to schools and shops, and much else before confirming the contract.

Pretty soon, they discover a nearby centre of worship’s amplifiers are soldered on maximum. The maxim here is “listen before signing.”

Here’s another hazard for those prioritising quietude: even in the supposedly residential gated communities, families set up salons, childcare centres and shops in their houses, bringing traffic with it.

In many Western nations, there are government-licensed commercial real estate agents – what North Americans call realtors. One call will usually deliver the response you’d expect after dialing emergency services.

The sales folk are hungry. They’re paid by commission; the more properties they can offload the richer they’ll become. That’s the theory, though much depends on the state of the national economy.

In Indonesia, the domestic market tends to be slow. Proof being, the sight of tattered and torn DI JUAL (for sale) and DISEWAKAN (for rent) signs which have suffered through more than a couple of wet seasons.

If the phone number is still legible, a call usually gets a discontinued tone. Delete the agent’s name from your notes. A business which can’t maintain a banner is unlikely to be keeping its books updated.

Even the big names react at their own pace. This column is still waiting for comment from a major agency that spends a fortune on advertising but evidently not on callbacks.

Buying is difficult: last year Indonesia Expat published information on foreigners’ rights to purchase property https://indonesiaexpat.biz/business-property/foreigner-owning-property-indonesia/

As the regulations seem to be churned monthly don’t just hire any lawyer, but a law office where conveyancing is their daily nasi goreng and they know the Ministry of Land’s latest laws. Some handy info is to be found here: https://www.globalpropertyguide.com/Asia/Indonesia/Buying-Guide

Unless you’re with a big corporation or campus which has promised housing to lure you to the archipelago, the reality about realty in Indonesia is DIY – do it yourself.

While cruising around suburbs, note the TANPA PERANTARA posters. These mean the owner will not be employing an agent and probably doesn’t want you to do so either. Decode the message yourself.

In most cities and suburbs, properties are found and deals are done by word of mouth. Checking expat groups is a good way to start.

For example, in Malang a community-minded couple circulates news of upcoming vacancies and runs ads for newcomers. See East Java Friends on Facebook.

But here’s the rub. Landlords who know that potential renters are stouter and heavier than the locals also assume the extra weight is located in the wallet, and so needs slimming.

Best have an Indonesian friend make initial inquiries and establish a price. Curiously, this most important of info is regularly omitted from adverts in regional dailies like the Jawa Pos and its scores of spinoffs. Newspapers may well have disappeared, along with supermarket check-out staff, in your hometown, but here both survive with house listings.

Aggregator sites worth browsing include https://www.rumah123.com/ and https://rumah.mitula.co.id/. Don’t assume they have all available properties or that those advertised are still on the market.

Because the real estate industry is still a mewling babe, there’s little mature data available. Where sales are recorded by government agencies that clip the ticket with stamp duties, capital gains tax, and other imposts, it’s possible to work out the price range of pads that appeal.

Here, sellers tend to think of a figure and double it because the cousin’s aunt in the next street said that’s what the property opposite went for. Or so their driver reckoned.

Internationally, the real estate industry is getting scientific in collating values and applying useful demographics, such as age and income.

The number of bedrooms and bathrooms advertised are crude measures; the rooms may be small and windowless, the yard tiny, and the street a jalan tikus (short cut) used by thousands of motorbikes when the main road is clogged.

Is the electricity adequate? The sole provider is the government-owned Perusahaan Listrik Negara (PLN), which chokes power to some homes to keep the tariff low. If you have a microwave and toasters, the setting may need to be lifted.

Indonesian landlords want their money upfront – all of it – and they usually seek contracts of two to three years. Change your mind once the ink has dried and it could well be bye-bye to all your savings. Disputes with landlords need to be settled face-to-face. Consumer protection law is not strong, which is being polite. Tenancy dispute tribunals are a foreign idea. Although legal action is available, anecdotally it’s rare to hear of foreigners winning, however strong their case.

It’s not all grim and gloomy though. There are decent landlords out there – just take time to search thoroughly. Also, don’t forget to say hello to the Rukun Tetangga (RT); the neighbourhood leader.

Chances are, she or he will already know you’re renting so get in first with the handshakes and learn about your civic duties. These are seldom onerous and generally, include occasional street clean-ups and coffee for the satpam (security guard).

Be discreet but friendly and helpful. In one of the world’s most densely populated islands, harmony and cooperation are essentials. Back home you probably won’t know your neighbours but here they’ll all know you.

(Your correspondent has experience renting in Surabaya but no legal qualifications – so get your own professional advice.)

See: Why are We More Prone to Making Bad Property Investments in Bali?

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