Last week’s real estate conference in Nusa Dua drew the heads of multibillion-dollar construction firms from around the world, many of whom expected to hear positive news from Vice President Boediono on foreign ownership of property in Indonesia.
They were disappointed, and left hanging.
The central government had said it was considering opening up the property sector to foreigners by allowing them to purchase apartments and other dwellings in certain areas of the country, mainly in Jakarta but possibly Bali.
This raised the hopes not only of investors wishing to embark on construction projects in this massive country but of foreign residents who have already bought property here under the peculiar “nominee” system that so often ferments trouble — when the Indonesian who owns the property for legal reasons decides they would like to own it not just on paper.
Boediono essentially said nothing on the issue — other than the government would like to liberalise the market but its hands are effectively tied. It is fractious politics that is blocking the road, not (necessarily) lack of leadership zeal. But observers point to the likelihood that such an all-encompassing scheme is never likely to come to fruition, given the complex maze of laws barring foreign ownership.
If that really is the case, that the proposal has died on the drawing board, it’s best to say so and move on.
Foreign construction firms are already here, however, but their scope of sales is limited. Others are waiting on the sidelines, until the ownership issue “becomes clear,” as one top executive attending the Nusa Dua meeting told this newspaper.
What is also not clear is the government’s reluctance to propel the Indonesian property market by an estimated US$6 billion annually by allowing foreign ownership. It need not be fearful: Our vibrant economy will only gain from the measure, and we only need look to our prosperous neighbour Singapore, where foreigners can purchase property, for proof.