Indonesia Residential Real Estate Market Size - Industry Report on Share, Growth Trends & Forecasts Analysis (2025 - 2030)

Indonesia Residential Real Estate Market Analysis

The Residential Real Estate Market in Indonesia Market size is estimated at USD 77.84 billion in 2025, and is expected to reach USD 114.11 billion by 2030, at a CAGR of 7.95% during the forecast period (2025-2030).

Indonesia's residential real estate sector is experiencing significant transformation driven by demographic shifts and urbanization trends. The residential property market has shown resilience, with the Residential Property Price Index (RPPI) in Greater Jakarta recording a 2.24% year-on-year growth in Q2 2023, indicating steady market appreciation despite economic headwinds. The market is particularly dynamic in major urban centers, where rapid urbanization and a growing middle class are creating sustained demand for housing. Property developers are increasingly focusing on the mid-market segment, recognizing the substantial opportunity presented by first-time homebuyers and young professionals seeking affordable housing solutions.

Foreign investment in Indonesia's residential real estate sector is gaining momentum, supported by progressive regulatory reforms and attractive valuations. As of 2023, foreign purchases of properties have spread across 13 provinces, with Jakarta, Bali, and Batam emerging as preferred destinations for international investors. The government has streamlined property ownership regulations for foreigners, requiring only a passport for purchase, though minimum price thresholds vary by location - for instance, landed houses in Jakarta must cost at least IDR 5 billion (USD 329,190) for foreign buyers, while apartment units require a minimum investment of IDR 3 billion.

The rental market has shown remarkable dynamism, particularly in premium locations. In the second half of 2023, rental prices for housing units experienced significant growth, with standard properties seeing 5-10% increases and high-demand properties witnessing adjustments ranging from 15-30%. This growth has been primarily driven by the return of expatriate mobility to pre-pandemic levels, with most foreign tenants coming from embassies, NGOs, manufacturing companies, and the consumer goods industry, typically occupying managerial positions or higher.

The construction sector is witnessing substantial activity with numerous major projects under development. In 2023, Jakarta alone saw the addition of more than 225,000 apartment units to its housing inventory, with several significant projects scheduled for completion in 2024. Notable developments include the Tunjungan Boulevard high-end apartment project in Surabaya, featuring 53 floors and 60,000 square meters of construction area, which will become East Java's tallest building upon completion. Additionally, developers are increasingly incorporating sustainable features and smart home technologies in their projects, responding to growing environmental awareness and technological preferences among buyers.

Indonesia Residential Real Estate Market Trends

Jakarta Witnessing Growing Housing Projects

The residential real estate market in Indonesia is experiencing significant growth, particularly in Jakarta, where new home and housing projects are rapidly emerging to meet increasing demand. In 2023, Jakarta's residential landscape witnessed remarkable expansion with a supply of more than 225,000 apartment units, demonstrating the market's robust development pipeline. A notable milestone was achieved in Q3 2023 with the completion of the Victoria Tower within the Fatmawati City Center project, adding 704 units to the market. The construction momentum continued with plans for completing two additional projects comprising 416 units by the end of Q4 2023, further enriching the residential offerings in the capital city.

The steady stream of new housing projects reflects developers' confidence in Jakarta's real estate market and their commitment to addressing the growing housing needs of the population. The apartment supply in Jakarta experienced a marginal growth of more than 0.3% quarter-on-quarter in Q3 2023, while showing a more substantial year-on-year growth of 2.7% compared to Q3 2022, culminating in a cumulative count of 225,871 units. This consistent growth in housing supply indicates a healthy market dynamic and suggests strong underlying demand for residential property in Jakarta, making it an attractive proposition for both developers and investors.

Increasing Residential Rental Prices

The Indonesian residential real estate market is witnessing a significant upward trend in residential rental prices, particularly evident in the second half of 2023. The rental market has shown remarkable resilience with most properties experiencing price adjustments ranging from 5% to 10%, while high-demand properties have seen even more substantial increases ranging from 15% to 30%. This price appreciation is primarily driven by the return of expatriate mobility to pre-pandemic levels, indicating a robust recovery in the premium rental segment of the market.

The surge in rental prices is further supported by the quality of tenant profiles, with most expatriate tenants coming from embassies, NGOs, manufacturing companies, consultants, and the consumer goods industry, typically occupying managerial positions or higher. These high-profile tenants show a strong preference for stand-alone houses and townhouses located in South Jakarta, particularly favoring upgraded or renovated properties. The combination of premium tenant profiles and their specific housing preferences has created a competitive rental market, especially in desirable locations, contributing to the sustained increase in residential rental prices across the residential real estate sector.

Segment Analysis: By Type

Villas and Landed Houses Segment in Indonesia Residential Real Estate Market

The villas and landed houses segment dominates the Indonesian residential real estate market, commanding approximately 58% of the total market share in 2024. This segment's prominence is particularly driven by millennials and Gen Z, who make up about 60% of home buyers on online platforms. The preference for landed houses is strongly influenced by the younger generation's desire for homes that meet their specific needs, including effective and efficient living spaces and internet connectivity to facilitate modern lifestyles. Real Estate Indonesia (REI) reports that around 79% of current residential development consists of landed houses, primarily in the price range of USD 19,134 to USD 63,780, reflecting the market's adaptation to contemporary consumer preferences. The segment's strength is further reinforced by developers' focus on creating innovative property projects that combine traditional housing concepts with modern amenities and smart home features.

Condominiums and Apartments Segment in Indonesia Residential Real Estate Market

The condominiums and apartments segment is experiencing the fastest growth in the Indonesian residential real estate market, projected to grow at approximately 5% from 2024 to 2029. This accelerated growth is driven by several factors, including the increasing urbanization in major cities and the growing preference for vertical living among young professionals. The segment's expansion is supported by significant development projects, particularly in Jakarta, where new residential construction projects have led to a supply of more than 225,000 apartment units. The growth is further bolstered by the return of expatriate mobility to pre-pandemic levels, with most expatriates originating from embassies, NGOs, manufacturing companies, and the consumer goods industry, typically occupying managerial positions or higher. The segment is also benefiting from the government's commitment to delivering cost-effective high-rise affordable housing units and implementing supportive policies like the Surat Kepemilikan Bangunan Gedung (SKBG).