The Indonesian government does not regulate the market price of property, property market price movements are fully controlled by market mechanisms. As long as there are still active buying and selling transactions, the property market price will move up.
In general, the property market in Indonesia recognizes two areas that are different from the level of increase in property prices, namely : Sunrise Area and Sunset Area.
If the property is located in the Sunrise area, almost all of the properties in this location will have an increase in property market prices every year and property prices will stagnate in the sunset area (there are no buyers who are interested in buying property in that area), thus the increase property prices in each area will be different.
Each region in Indonesia has a commercial center, for instance in Jakarta. Each region in Jakarta (Central, East, South, West, and North) has a Central Business District (CBD), but the movement of market prices from each regions are different in the rate of growth of prices.
Each area has a DNA Region, such as a region that will develop as an office commercial or trade, or will develop as an industrial area. In that case, the property market prices of each type of property from each Region has difference in the price growth rate. Growth of infrastructure in an area can increase the property market price in an area, but if growth of infrastructure in that area is slow, most of the property market price will stagnate.
The Indonesian government regulates property taxes under the Ministry of Finance, in which the property tax does not reflect the market price of the property. Property tax only used for taxation of property. Related to this, it’s necessary to understand the property market in an area in depth.
As a property valuer, is important to understand about development growth in each area in order to analyze data in depth, especially such as offering price data or current market price data. APSi, 24.03.23