City plans to turn Kemang into commercial zone

The Jakarta Post, Wed, 03/18/2009 2:35 PM

JAKARTA: The city administration is planning to transform the hip residential area of Kemang, South Jakarta into a commercial area.

Wiriyatmoko, head of Jakarta's Spatial Planning Agency, said Tuesday that his office had carried out a study on transforming Kemang from a residential area to a commercial zone. The agency decided to let businesses in Kemang continue to operate.

"We plan to transform the area into a commercial zone," Wiriyatmoko said, as quoted by beritajakarta.com on Tuesday.

The agency will propose the plan to Jakarta Governor Fauzi Bowo.

Until now, companies operating in Kemang have been paying fines to the city administration for running their businesses in a residential area.

The area was a plantation in the 1950s. It became an expatriate enclave in the 1980s as cafes, bars and galleries began to flourish.

Some Kemang residents have complained of traffic jams, loud music, and drunks in their residential area. Responding to their complaints businesses have said that Kemang residents should accept that the area is turning into a commercial zone. - JP

Expats hail ownership plan

Prodita Sabarini, THE JAKARTA POST, JAKARTA | Fri, 02/27/2009 2:29 PM 

 

Expatriates living in Jakarta and surrounding areas said they welcomed the government's plan to allow foreigners to own property in Indonesia for 90 years.

 

Currently, the National Land Agency, Home Ministry and Public Housing Ministry are revising a 1996 law on foreign ownership of property. The revision will extend foreigners' utility rights of houses, apartments and condominiums in Indonesia from 25 to 90 years.

 

On Thursday, German national Dieter Speers said he welcomed the plan. Having lived in Indonesia for almost 20 years, he said owning land in the country would definitely bridge the gap between foreigners and locals.

 

"I buy a property to live in. I obey the culture and adjust to the neighborhood," he said.

 

"I'm more likely to be part of the community by owning a house than just renting one apartment and moving the next year."

 

Speers purchased a house in 1999 under the 1996 rules.

 

Speers works in the bakery and cafe business, after serving as a professional chef in five-star hotels in Jakarta. He commutes from his house in Rancamaya, Bogor, to his workshop in Kelapa Gading, North Jakarta.

 

He said the choice to live and have a business in Indonesia was his own.

 

"I'm not married at all. I'm living on my own. I'm very free to move anytime, but I chose to continue to stay here," he said.

 

"Indonesia is so promising, in terms of entrepreneurship and the hospitality of friends is second to none."

 

Another expatriate, Karen Merrick, said that if the plan passed, it would help sustain the economy.

 

"I think the plan would widen the popularity of Indonesia from other countries," she said.

 

Malaysia and Singapore allow expatriates to own property. In Singapore, an apartment would cost Rp 170 million per square meter while, in Indonesia the price is still around Rp 10 to 25 million per square meter.

 

Last week, the chairman of the Indonesian Real Estate Association (REI), Teguh Satria, urged the government to revise the regulation to allow foreigners to acquire 70-year home ownership rights in order to help the economy.

 

Property analysts said that because of the global economy crisis, within two years the property business here would be sluggish.

 

The draft revision reportedly allows ownership rights up to 90 years straight, longer than what the REI demanded.

 

CEO of property giant Agung Podomoro Group, Handaka Santosa, said the government was taking too long to deliberate the regulation.

 

The ministry has been working with the National Land Agency to draft the regulation with input from the Indonesian Real Estate Developers Association since last year. It was scheduled to go into effect by the end of 2008, or early 2009 at the latest.

 

"They should hurry up and not take too much time to pass the law," he said.

 

"The government should be smart in looking for a breakthrough to help the economy," he said.

 

Handaka said opening up the real estate market to foreigners was a good way to attract investment.

 

"Compared to the stock market, real estate is safer, because even though they leave the country, the property is still here," he said.

 

Calls to open up the real estate market to foreigners have been sounded since 2006. That year, REI estimated that the country could reap at least $10 billion in foreign investment in five years should it decide to open the sector.

Expat house ownership welcomed

Benget Besalicto Tnb., The Jakarta Post, Jakarta | Thu, 02/19/2009 2:10 PM 

 

Property analysts welcome plans to allow foreigners to own houses as it will stimulate the property market despite the slowing economy.

 

"It's good news. I think if it is realized it will help stimulate the local market significantly," Djodi Trisusanto, a property analyst with Jones Lang Lasalle, told The Jakarta Post on Wednesday.

 

He was commenting on President Susilo Bambang Yudhoyono's statement that he would ask the National Land Agency (BPN), the home minister and the state minister for people's housing affairs to conduct an in-depth study into granting expatriates home ownership rights.

 

Unlike some other countries, such as Malaysia and Singapore, which allow expatriates to own property, Indonesia still bans such ownership. Based on the 1996 government regulation, foreigners cannot own houses, apartments, and condominiums in Indonesia. They are only allowed to have utility rights up to 20 years and are then eligible for another 20 year extention.

 

During the Tuesday dialogue with the president after the inauguration of 114,000 units of simple low-cost houses in Lamongan, East Java, the chairman of the Indonesian Real Estate Association (REI), Teguh Satria urged the government to revise the regulation by allowing foreigners to acquire a 70-year home ownership right, in order to help stimulate the local economy.

 

"Amid the slowing growth in the property market, allowing foreign ownership will certainly help push up the demand for property here," said Arief Rahardjo, a property analyst with PT. Cushman & Wakefield Indonesia, a property consultancy company.

 

Analysts have predicted that the property market this year will see slowing growth due to the global economic downturn. During the last quarter of last year property sales already dropped by between 10 and 20 percent.

 

But Djodi warned the government should regulate the categories of properties to be opened up to foreigners and the basic requirements for ownership so as to optimize their potential economic contribution.

 

"I think middle-to-lower market properties should not be allowed to be owned by foreigners."

 

"The government should design the foreign ownership regulation so as to avoid any speculative buying by foreigners," he noted.

 

To avoid speculative purchases, Djodi suggested government should make sure that ownership was only granted for permanent residence and not open the market too much.

 

Both Djodi and Arief noted that despite the foreign ownership ban, many expatriates in practice now owned houses, apartments, or condominiums, using loopholes in the existing laws.

 

For example, foreigners can make use of local people to buy a house. Then before a notary they will sign an agreement saying that the local people get a loan from the foreigners at the amount of the house price. And based on the agreement, the loan will be made permanent while the house is presented as collateral which can be taken over anytime.

Government mulls allowing expatriates to own houses

Ridwan Max Sijabat, THE JAKARTA POST, LAMONGAN 

Green housing: President Susilo Bambang Yudhoyono plants a Sawo Kecik tree Tuesday at a park in the Graha Indah housing complex in Tambakrigading village, Tikung district, Lamongan, East Java. First Lady Ani Yudhoyono, several ministers and the Indonesian Military and National Police chiefs were also invited to plant various trees, after the President inaugurated the opening of some 114,000 units of healthy simple houses (RSH) in the area. JP/Ridwan Max Sijabat

Expatriates, investors in particular, living in Indonesia will no longer have to spend much money to rent luxury residences in the country. 

President Susilo Bambang Yudhoyono said Tuesday he would ask the National Land Agency (BPN), the home minister and the state minister for people's housing affairs to conduct an in-depth study into granting expats home ownership rights. 

"The government has no objection to this, provided it will benefit the people and make the country's climate more conducive to foreign investment," Yudhoyono said at the launch of 114,000 units of healthy simple houses (RSH) in Lamongan, East Java. 

The event also featured a dialogue with housing developers and homeowners, in which the Indonesian Real Estate Association (REI) raised the issue of home ownership for expatriates. 

Currently, expats in Indonesia are not allowed to own homes. 

A 1996 government regulation states they may only have house utility rights for 20 years, which may be extended for another 20 and 25 years consecutively. 

REI chairman Teguh Satria called on the government to revise the regulation to grant expatriates a 70-year home ownership right, in an effort to make the country more competitive and conducive to foreign investment. 

"This way, Indonesia will be able to compete with Singapore," he said. 

"If the government regulation is revised to allow expats to own homes, the prices of our apartments and other properties will rise sharply," he said. 

"Thus many foreign investors will not be interested in luxury residences and apartments, because they have the right to only use them for 20 years, and afterward they have to resell them or return them to the government." 

The REI also lauded the government's attention to its program to develop affordable homes for low-income people, in the hope the government would continue granting subsidies for the project. 

"SBY is the only president who has officiated three housing complexes built under the 100,000-house program, and we expect him to continue supporting the program in the coming years," Teguh said. 

Regarding on the housing subsidy, the President pointed out the government's limited capability and said it had allocated Rp 2.5 trillion in subsidies to develop affordable houses for low-ranking civil servants, servicemen and police personnel this year, with bigger amounts of the state budget allocated for the development of education, health and infrastructure projects. 

Yudhoyono also asked Indonesian Military chief Gen. Djoko Santoso and National Police chief Gen. Bambang Hendarso, both present at Tuesday's event, to raise housing deposits for servicemen, because the monthly wages of low-ranking soldiers and police personnel had increased more than twofold to Rp 1.7 million from Rp 700,000. 

During the ceremony, the President also witnessed the handover by state insurance company PT Jamsostek of Rp 174.7 billion in housing loan assistance for 25,000 workers in East Java through state-owned Bank Tabungan Negara (BTN).