Buying In Indonesia
- Thread starter CalNash
- Start date
Buying Property in Gili Islands, Indonesia
Hi Neeko
Interesting that your information was provided by "locals". You may have missed the following comments in my earlier post:
"...This gives rise to a pervasive myth that foreigners simply cannot own land in Indonesia. The source of this information is often a girlfriend or prospective wife or an Indonesian "friend" or agent who will be happy to "help you overcome this problem" by allowing you to buy the property in their name.
A variation is the expatriate agent or Indonesian property lawyer (Pejabat Pembuat Akta Tanah or PPAT) who will tell you that you need to buy in the name of an Indonesian nominee - they may even have a candidate standing by to fill this role."
I repeat that you, as a foreigner, really CAN purchase property in the Gilis or elsewhere in Indonesia PROVIDED YOU FOLLOW THE RIGHT PROCEDURES. Perhaps have another look at my earlier reply to DavidMc.
Developers in the Gilis will typically be offering their villas or other properties under the Hak Pakai "Right to Use" category of title. This is issued for an initial 25-year term with a further 25 year rollover to follow. It is often referred to as "leasehold" but in fact is a form of CONDITIONAL Individual Title.
There are limitations on this form of title - namely that you may own only ONE property, you need to be "domiciled" in Indonesia, you can only transfer (sell) the property to an Indonesian or to an expatriate who is domiciled in Indonesia, you will not be able to obtain a mortgage and you cannot bequeath the property. These limitations do not apply to the other main form of title called Hak Guna Bangunan (HGB or Right to Build) - this is a conditional corporate title and is broadly comparable to freehold title in Australia.
It can be difficult to get up to speed on the nuances of these issues as the Land Laws obviously are all written in Indonesian but there are English language explanations of aspects to be found via the Internet.
Hope this clarifies the information you were given. By the way, prices ranging from US$99k for a villa in the Gilis sounds very much on the low side. I understand vendors of villas there are typically asking in the hundreds of thousands.
Hi Neeko
Interesting that your information was provided by "locals". You may have missed the following comments in my earlier post:
"...This gives rise to a pervasive myth that foreigners simply cannot own land in Indonesia. The source of this information is often a girlfriend or prospective wife or an Indonesian "friend" or agent who will be happy to "help you overcome this problem" by allowing you to buy the property in their name.
A variation is the expatriate agent or Indonesian property lawyer (Pejabat Pembuat Akta Tanah or PPAT) who will tell you that you need to buy in the name of an Indonesian nominee - they may even have a candidate standing by to fill this role."
I repeat that you, as a foreigner, really CAN purchase property in the Gilis or elsewhere in Indonesia PROVIDED YOU FOLLOW THE RIGHT PROCEDURES. Perhaps have another look at my earlier reply to DavidMc.
Developers in the Gilis will typically be offering their villas or other properties under the Hak Pakai "Right to Use" category of title. This is issued for an initial 25-year term with a further 25 year rollover to follow. It is often referred to as "leasehold" but in fact is a form of CONDITIONAL Individual Title.
There are limitations on this form of title - namely that you may own only ONE property, you need to be "domiciled" in Indonesia, you can only transfer (sell) the property to an Indonesian or to an expatriate who is domiciled in Indonesia, you will not be able to obtain a mortgage and you cannot bequeath the property. These limitations do not apply to the other main form of title called Hak Guna Bangunan (HGB or Right to Build) - this is a conditional corporate title and is broadly comparable to freehold title in Australia.
It can be difficult to get up to speed on the nuances of these issues as the Land Laws obviously are all written in Indonesian but there are English language explanations of aspects to be found via the Internet.
Hope this clarifies the information you were given. By the way, prices ranging from US$99k for a villa in the Gilis sounds very much on the low side. I understand vendors of villas there are typically asking in the hundreds of thousands.
Actually the villas had just been built. Th ere on 25 year lease from 99k usd..im not intrested in buying. There complex had just been built last year i stayed on gili meno also where we stayed australians owneed the villas where we stayed (so they said) and just said they come over a few times a year
Indonesian property - Gili Islands, Lombok, Bali
I am with you on that Rixter - I would be looking to rent in the Bali, Lombok, Gili areas, particularly if not planning on living there permanently.
Like you I know of people who have relocated, looked around and found places there at very inexpensive rentals and enjoy the very low living costs to be found in all of Indonesia (outside the hotels and prime tourist areas). For example a housemaid will cost around AUD$250 a MONTH.
Some of the guys working fly in-fly out in the WA mining areas who do not have families keep a rental in Bali as a base for their rotations because the costs are so low.
As mentioned in response to Neeko the price of the villas he looked at in Gili is quite low but property prices generally around the Bali-Lombok area are expensive and these places are very much dependent on tourism - they are essentially single industry regions. When they are good they can be great but when there is an economic downturn or, heaven forbid, some kind of terrorist threat the visitors stop coming and the bottom drops out of accommodation and resale markets.
There is no doubt many buyers in these areas have made capital gains over recent years, particularly early buyers after the Bali bombings. There is no doubt also that it is an attractive place to retire to, particularly for people with limited retirement incomes.
However, we have opted for Batam just 12 miles across the water from Singapore with a highly diversified economy and one of the fastest growing regions in Indonesia and south-east Asia (to give you an indication electricity consumption here has been increasing exponentially by 13% a year). In the highly unlikely event of a bomb being detonated in the downtown area here on a Saturday or Sunday then the factories, shipyards, heavy construction yards, building sites and all the other activities of a busy growing city would be operating as per usual on Monday.
I am with you on that Rixter - I would be looking to rent in the Bali, Lombok, Gili areas, particularly if not planning on living there permanently.
Like you I know of people who have relocated, looked around and found places there at very inexpensive rentals and enjoy the very low living costs to be found in all of Indonesia (outside the hotels and prime tourist areas). For example a housemaid will cost around AUD$250 a MONTH.
Some of the guys working fly in-fly out in the WA mining areas who do not have families keep a rental in Bali as a base for their rotations because the costs are so low.
As mentioned in response to Neeko the price of the villas he looked at in Gili is quite low but property prices generally around the Bali-Lombok area are expensive and these places are very much dependent on tourism - they are essentially single industry regions. When they are good they can be great but when there is an economic downturn or, heaven forbid, some kind of terrorist threat the visitors stop coming and the bottom drops out of accommodation and resale markets.
There is no doubt many buyers in these areas have made capital gains over recent years, particularly early buyers after the Bali bombings. There is no doubt also that it is an attractive place to retire to, particularly for people with limited retirement incomes.
However, we have opted for Batam just 12 miles across the water from Singapore with a highly diversified economy and one of the fastest growing regions in Indonesia and south-east Asia (to give you an indication electricity consumption here has been increasing exponentially by 13% a year). In the highly unlikely event of a bomb being detonated in the downtown area here on a Saturday or Sunday then the factories, shipyards, heavy construction yards, building sites and all the other activities of a busy growing city would be operating as per usual on Monday.
A country hostile to Chinese and Australia is a tough call for Chinese Australians.
You have to be kidding, right Deltaberry?
From the point of view of Australians probably the other way around (especially for those who have never spent time in Indonesia or South-east Asia and rely on the tabloid TV or shock jocks as their main information source).
From the Chinese perspective probably a bit out of date. There certainly was strong anti-Chinese sentiment in Indonesian international relations and public attitudes in 1965 at the time of the Coup and the ascendency of the Suharto New Order regime. This persisted with many restrictions on ethnic Chinese through to the time of the Asian financial crisis of 1997-98.
Part of the historical hostility of the ethnic Indonesia majority (88% Muslim) derived from the commercial success of the relatively small Chinese minority (mainly Christian and Buddhist) and an aloofness on the part of the ethnic Chinese diaspora.
These days (thanks to Gus Dur - a MUSLIM leader who served as President from 1999 to2001) the Chinese New Year is a public holiday, and dragon dances are permitted. Chinese direct investment is being encouraged and is increasing and Chinese tourists numbers visiting Indonesia also are increasing rapidly. Indonesian-born Chinese are major players in building development, manufacturing, trading, retailing, wholesaling, finance and resources.
You still will not find ethnic Chinese in the military, the police or higher levels of the bureaucracy. But the current Governor of Jakarta (Ahok) is ethnic Chinese.
Batam, where I live, is home to one of the largest Buddhist temple complexes in South-east Asia. My young son attends a Buddhist school associated with it which is funded by Batam's ethnic Chinese community. He studies in Indonesian, English and Mandarin and the school welcomes Muslims, Christians and others.
Just down the road on the north-east of our island is a very impressive 135 megawatt coal-fired power station which began operation in late 2012 and was funded and built by Chinese interests with Chinese technology. It's capacity is due to be expanded soon.
The times certainly are a-changing - probably due in large part to the increasing prosperity of the wider Indonesian community and the confidence which comes with that
Oh wow, you're well informed. I live there in my childhood during the 1998 riot and several years onwards. House were destroyed and the girls were raped and killed.
Not a great memory (apart from not needing to go to school). It might be different now, but my memory on how Indonesian born Chinese were treated will be there for a long time.
In terms of property, family members have properties around Jakarta area and have made money from them. Some pockets should be avoided unless you know the people there to keep the property safe. I simply think overseas investors should do a lot more than number check to buy there.
I like how cheap it is to live there, just not a fan of the heat and humidity.
I've spent some time on all Gilis. Magical place - I love it. However, there are no police on the islands, my understanding is there is a 'tribal style' policing keeping the peace.
i.e. if there is some kind of problem then the 'island chief' sorts it out. And be careful not to get on the wrong side of him, because they'll bury you up the back end of the island and nobody would know any better. The cover story would be something like 'last seen entering the water with snorkelling gear'.
In the Lonely Planet guide to Lombok (Gilis are part of Lombok) the travel writer describes a story where he was photographing a isolated beachfront area for the guidebook when he was confronted with (and had to run for his life from) angry locals who mistook him for the property developer who bought lots of land in the area (and the locals felt they were ripped off).
It may well be possible but one would have to thoroughly check it out. It would be an amazing investment if you can do it.
i.e. if there is some kind of problem then the 'island chief' sorts it out. And be careful not to get on the wrong side of him, because they'll bury you up the back end of the island and nobody would know any better. The cover story would be something like 'last seen entering the water with snorkelling gear'.
In the Lonely Planet guide to Lombok (Gilis are part of Lombok) the travel writer describes a story where he was photographing a isolated beachfront area for the guidebook when he was confronted with (and had to run for his life from) angry locals who mistook him for the property developer who bought lots of land in the area (and the locals felt they were ripped off).
It may well be possible but one would have to thoroughly check it out. It would be an amazing investment if you can do it.
I hope that those that want to invest in Indonesia arent the type that visitied on holiday, and thought, oh wow this place is great for a holiday, everything is cheap, and every hotel/shop/restaurant is full of tourists! I gotta invest!!!
I personally wouldnt invest due to 2 things, the corruption and legal complications about foreigners not being able to own etc.
dont worry, been there done that, whenever I go to bali, I still put my investing hat on while on my 4th cocktail!
I personally wouldnt invest due to 2 things, the corruption and legal complications about foreigners not being able to own etc.
dont worry, been there done that, whenever I go to bali, I still put my investing hat on while on my 4th cocktail!
Sad that your family was caught up in that madness EN710 - I very much understand your feelings and empathise. Nearly two decades have passed and many Indonesian-born Chinese who have similar memories are very circumspect and tend to stay below the radar.
There also are still many Indonesian nationals who harbor resentments over both the success and wealth of ethnic Chinese and perceptions of past unfair treatment by Chinese employers or traders. But on the whole the relationships seem to have improved greatly. I know Indonesian-born Chinese who have lived, studied and worked overseas, including mainland China. They consider themselves Indonesians first and Chinese second.
BTW I was first prompted to begin evening classes in Indonesian when working in property in Perth around 1998 because I was meeting so many Indonesians with stories like yours looking to relocate their families in Australia. Very sad for them but ultimately meeting and talking those very good people was a catalyst that ultimately led to my relocating here.
And yes - you are right. It's a very cheap place to live and I do not know anyone who enjoys the heat and humidity of Jakarta. However, there are plenty of other places with equable climates like Bandung. I hate cold and like the warmth here in Batam where we do not suffer too much humidity even though only 120k from the Equator.
Hey Truly Exotic - isn't that how all those Victorians took over the Sunshine Coast and even the Gold Coast back in the day? As a former Nambucca Valley boy I saw a lot of the same there and in other tourist places like Port Macquarie, Coffs Harbour and north to Byron Bay. The agents had a field day in January and subsequent school holidays working with cashed up Sydney-siders who had sold up and were seduced by the sun, the sea and the sand.
Mixed results for some of those people long term and no doubt much the same in Bali unless purchasers are re-locating to a new lifestyle long-term and have some form of independent income. Always nice to dream, with or without the cocktails, but best with a dash of practicality and pragmatism.
BTW understand your sentiments re the corruption and legal complications but I have to tell you that perversely these kinds of difficulties create opportunity. It can be tough going but the rewards can be great for those who can persist and work their way through the system - if it was easy everyone would be doing it.
Too true.
What is your goal is? For a holiday, to make an income? Either way I would not do it.
I personally know more than a handful of people that have lost a LOT of money buying in Indonesia. You have very little rights there. If you buy with a "friend" the friend has all the rights. Be prepared to walk away with nothing if the friend decides they want it.
