Positive economic growth is having a knock on effect to property related activity.
Indonesia’s GDP grew by 5.02 percent in 2016. This year this figure is expected to be 5.1 percent and 5.5 percent for the next year. These figures are spurred on by increased exports and government. Plus they suggest that the country is only heading in an upwards direction, despite it being at a moderate pace, thanks to new policies based around fiscal and monetary aspects. Both the Japan Credit Rating Agency and Standard & Poor’s Global Ratings have ranked Indonesia’s credit rating as stable with a positive outlook. It is all looking fairly rosy for economic growth in Indonesia.
At the same time the Bank of Indonesia is playing its role in the economy, and property world too. Last month they maintained interest rates at 4.75 percent per annum. Plus they ensured that there were no movements on deposit and lending facility rates too. These figures have stood at this level since October 2016 and creates an enticing environment for investors. Low interest rates are expected to increase spending activity. This has been illustrated by figures released by the Bank of Indonesia that reveal that the property credit segment saw growth of 15.2 percent for the first three months of this year. This is a big increase from 2016 which saw growth of 11.4 percent.
This increased activity is expected to continue. The tax amnesty is cited as one reason for this. Plus also the lower required deposit of 15 percent as set out by the Bank of Indonesia. As of April inflation was at 4.17 percent, within the government’s target of between 3 and 5 percent, this plus the stable rupiah are encouraging signs for investors of the stability and environment they wish to invest in.
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