Indonesia’s overpopulated capital is predicted to be Asia-Pacific’s top real estate market in 2013, edging out such established markets as Hong Kong, Singapore and Sydney. This is according to a report released by PricewaterhouseCoopers and the Urban Land Institute.
Dubbed ‘Emerging Trends in Real Estate – Asia Pacific 2013’, the report says Indonesia’s economic turnaround driven by a strong domestic demand and resource-oriented economy has impressed (and lured) international investors.
According to the report, Indonesia’s interest and inflations rates are very much under control, while its GDP is growing at an impressive 6.5% annually. However, the country’s main economic driver is foreign direct investment, which is increasing at a much higher rate: 39% in the first half of this year.
Property services firm DTZ recently reported that office rents surged 29% year-on-year in Q3 2012, largely driven by demand from foreigners and locals alike.
Strong growth has helped Jakarta jump 10 places from its 2011 ranking. However, PricewaterhouseCoopers cautions that the city’s real estate is not entirely rosy. Difficulties in finding inexpensive bank loans, trustworthy local partners and land with disputed ownership all spell ‘buyers beware’.
Below is the report’s top 15 cities in the Asia-Pacific for real estate investment.
1. Jakarta, Indonesia
2. Shanghai, China
4. Sydney, Australia
5. Kuala Lumpur, Malaysia
6. Bangkok, Thailand
7. Beijing, China
8. China’s second-tier cities, such as Chongqing, Tianjin, and Shenyang
9. Taipei, Taiwan
10. Melbourne, Australia
11. Hong Kong
12. Manila, Philippines
13. Tokyo, Japan
14. Seoul, South Korea
15. Guangzhou, China