Many industry observers believe investors have been waiting for Indonesia's General Election Commission (KPU) to issue their decision on the country's recent elections following objections to the results. This decision was announced last week after the Constitutional Court rejected complaints that "presidential candidate Prabowo Subianto was the victim of widespread fraud" as being unfounded say The New York Times.

Wait and See

Liputan6 quote a recent report from Bank Indonesia (BI) indicating that investors and entrepreneurs have been waiting for this announcement with their chequebooks. This was supported by their research indicating there has been a slowdown in the economy in the second quarter of the year. Despite this however, there were still indicators that business activities were moving in a positive direction said Bank Indonesia's Bali Manager of Data Functions, Economic and Financial Statistics, Christina Erawati as reported by Liputan6.

The official announcement that Jokowi and his running mate Ma'ruf Amin, are now the legitimately elected President and Vice President of Indonesia will change the business and investment climate across the country and according to Kompas, the news was immediately welcomed by real estate investors and developers.

Real Estate Response

Terje H Nilsen from Harcourts Seven Stones believes this is exciting news. He told WILLIAMS MEDIA there has already been an increase in the number of requests and projects from domestic investors with plans for Bali.

Soelaeman Soemawinata, General Chair of the Indonesian Real Estate DPP (REI), told Kompas that the "hope is the future government that will focus on improving human resources, and will make more economic policies that can encourage the private sector to play more roles and pro-business policies that foster the realty sector."

Foreign Ownership and Investment

One of these aspects, that most in the real estate industry support, is around foreign home ownership. Olivia Surojo, Finance Director and Corporate Secretary of Metland, hopes the new government would look more seriously at the issue. "There are a number of things such as foreign home ownership, which are still constrained … because the details are not too clear," Olivia told Kompas.

Nilsen believes the new Jokowi administration will continue to deregulate and make it easier for foreign investors across the board, and specifically in the property sector. "The rumored HGB title for foreigners will hopefully be announced soon, which is why it's so important, for both foreign and domestic investors to start with a clear road map of their investment plans."

It is the domestic residential market that still drives Indonesia's property industry.  Senior Associate Director of Colliers International Indonesia, Ferry Salanto believes the government has been working on this by issuing several programmes including a Loan to Value (LTV) relaxation, which was reported by Gapura Bali last year, but Salanto hopes the new administration will look at reducing loan interest rates, which he believes would improve the property sector.

Sources: Liputan6, Bank Indonesia, Kompas, The New York Times, Gapura Bali

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