Thread: Indonesian house price index % change year on year 07

Unfortunately keeping the laws as they are won't help Indonesians - from a macro economic perspective. Yes, on the micro level when you look at individual stories there are people who will suffer as a result of opening up the laws on foreign land ownership. I for one try to keep the sour taste of individuals stories out of my reasoning. The truth is that policy needs to be derived in the interests of the masses - overall if you look at the growth in China, that growth says that as a whole the standard of living has increased in China. Now, at a closer look, the leftists (which I'm one of) and the socialists (which strangely enough I'm not one of) will say, "oh yes but the distribution of wealth is so distorded, you can't really say that chinese have benifited.. so many farmers have been forced from their land to move to the cities..".. yes that may be true from a 200 foot perspective, but unfortunately government policy really needs to say, "too bad, overall the nation is booming and we will continue to set policy from a 15,000 foot view"..

now, i'm not trying to compare indonesia to china.. and in fact china doesn't allow unconditional ownership of land by foreigners either.. i remember being at canning college at a year or so after the financial crisis and my economics lecturer was saying how the rupiah's plunge had really hit indonesia hard, especially those abroad.. he started explaining some of the things the australian government was doing to help indonesia cope with the crisis.. i raised my hand and asked why didn't australia just start buying up all of indonesia's tangible assets from underneath them.. he said there'd be a question of ethics involved.. i thought to myself, "ethics? what's ethically wrong with exploiting an opportunity in a fair trade that both buyer and seller are in agreement to?".. anyhow of course, some time later i realized it wouldn't be so simple.. i.e. if there was such a large sudden buying of the rupiah, then all of a sudden it would skyrocket and those assets wouldn't look so cheap.. but in essence, it would help indo from a macro perspective..

let's look at a scenario where indo allows foreign ownership of land..

1. Land prices skyrocket
2. The rupiah skyrockets because to buy land in indonesia, most transactions will at some point need to be converted back to rupiah
3. A strong rupiah combats the rampant inflation burdening the country
4. Overall standard of living increases from increase in foreign investment

anyhow, there's always the good and the bad.. like i said, looking at things too close to the ground is something i think government has to avoid.. decisions need to be made for the masses and the masses are represented in macro economic data..

ct

I think that changing the rules for landownership will not change much for the average Balinese. Most land worth while is already owned by non-Balinese Indonesian people, like the family of the former president. The land I have “bought” in the North of Bali was owned by a family from Maduro and the neighbouring land is owned by Indonesians living in Europe.

Maybe for the Balinese themselves the profit from investment, employment and increasing spending on the Island will outweigh the loss of ownership of the land.

This is a very subjective topic and just looking at it in the most simple way Jimbo has most of it covered the explotation/speculation of and by some is balanced somewhat by the genuine bali lover who seeks to co-exist and contribute to lives of many in their banjar . I am sure there will be many who read this that see this as blind idealism but far from looking at this in a bland $ value economist point of view there is so much more to life . The island of Bali has been exploited by so many over the years that no matter what happens foriegn ownership or not they will adapt in their positive manner and make the most of it . To all on the Forum i would like to wish all a very happy New year Selamat Tahun Baru dan salam untuk Semua. :wink:

The big bad monster that people fear will devour the island should ownership laws change has been feasting all the while! It's not how (own, lease, steal, whatever) it's what, as in what do you do with or on the land. I'll bet the house that all the development I personally find tasteless, destructive, and exploitive is sitting on leased land. And an effective government regulatory process which could permit foreign participation without giving the island away is the same required to effectively administer the island under existing rules and regulations....and that clearly is not being done.

JUST YOU ALL WAIT, the future of Bali will be highrises. cruise ships, monorails..........enjoy! Indonesia has a piss poor record of protecting their people and their lands. That's not going to change for a long time.

The BEST we as expats can do is to DO THE RIGHT THING and if you don't know what that is don't ask me.

To reply to Kadeks question as to why Bali? Well, its got alot going for it for obvious reasons. Ya,its a bit tough to play the game sometimes, but its worth it if you want it. I think it takes a certain kind of person who can cross cultures and survive outside of their "comfort zones". Some succeed some fail.Its the journey that counts.
I do believe that the current land law does in some way protect the people and the resource(land)from being sold out to foreigners.But those complexities that you speak of weed out the casual investor. I do think that they should limit the amount of land one can buy to smaller parcels,so as not to deplete the food source for a ever growing population.

Originally Posted by Markit

What I mean is that when it is finally allowed people on Bali will sell their land, as they already do, but for a realistic market price. Not 50 - 100 million rupiahs for beach-side property.

Where did this mind-boggling price come from! I watch North Bali property prices from time to time and know they are lower than South Bali. In the north, I think Rp 100 juta might get you 1.5 are on the beach front with no buildings. But no-one wants 1.5 are. Realistically a beach front block of say 11 are might be more like Rp 750 juta, and the buildings pools etc might double that.

I think the current ownership arrangements are OK, and that the values that the market currently deteremines are realistic. I don't see any need to allow foreigners to directly own the land, and even if this were done, I don't think the values would shoot up all that much. (Maybe this is a minority view-point.)

Then getting back to the original issue, from what I can see, increases in values for North Bali villa properties would be no more that 7% at present. Given that inflation in Indo is 5 or 6% - this means the property values are currently fairly static as the article implied.