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Starting a Real Estate Agency in Indonesia

5 min read|Last Updated: September 6, 2022|
What’s in this article

The real estate industry of Indonesia is one which has been rapidly gaining in prominence. For this reason, many people have been trying to enter this lucrative industry by starting an Indonesia-based real estate agency of their own; however, this is not always a simple task.

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The Indonesian housing industry is one which has been growing at a rapid rate. The real estate sector in Indonesia is expected to grow substantially during the coming years. The latest statistics showed that prices of the housing industry in Indonesia rose by 0.42% when compared to those of the preceding quarter.

The real estate industry in Indonesia has benefited from an increase in property prices in 18 major cities. The Indonesian government has done much to support the growing population but has not always been able to keep pace with the demand for the 40,000 homes that are required yearly. Furthermore, many of Indonesia’s millennials cannot afford to buy houses in urban areas. These are just some of the issues the real estate agency business in Indonesia today.

Reasons to Start a Real Estate Agency in Indonesia

The increasing strength of the Indonesian economy and the increase in the number of middle-income people have made homeowners and commercial owners desire to find the perfect spot to reside or start their company. There are also several other reasons why one should start a real estate agency in Indonesia.

The increased demand for residential properties has made many Indonesian investors enter the real estate market. The country has witnessed much growth in the real estate market over the last year, thus leading to many properties to be built in Indonesia. One can either analyze the portfolio of real estate agents themselves or use the services of an experienced agent who knows much about the Indonesian property market before entering the real estate industry in Indonesia.

Another reason to start a real estate agency in Indonesia is due to the fact that the country has an enormous customer market. The country is home to one of the world’s largest populations. Furthermore, the growth of the industry has also made people interested in opening real estate agencies.

Indonesia is becoming one of the economic powerhouses of the Asia-Pacific region. Therefore, careful investments in this market will be likely to turn a profit. Astute buying and selling of real estate properties will provide immense benefits to brokers and investors alike.

Indonesia is expected to become a housing and commercial hub which will rival other Asian countries such as China and India. For this reason, many international real estate agencies companies are interested in commencing business operations in Indonesia. These entries will not only prove helpful for investors but also the country’s real estate agencies as a whole.

What to Do When Starting a Real Estate Agency in Indonesia

Indonesia has a fast-growing economy that makes it fit for development of major real estate projects. The country has also benefited from increased foreign investment from countries such as South Korea, China, and Japan. Those who plan to start a real estate agency in Indonesia ought to be aware of several important points.

Those who intend to start a real estate agency ought to consider the marketing factors which will either increase or decrease the profitability of the company. The real estate business is an ever-growing business in Indonesia with much potential for profit; thus, one must make sure that no action goes to waste in this regard.

Most real estate agencies in Indonesia start in small towns before moving on to larger cities. They often brand their real estate business through local advertisements. Real estate agents also ought to be able to select the proper location for investment, build a team which will carry out research appropriately, and understand the consumers’ wants.

Real estate agencies must also focus on the building of infrastructure and visual impact of houses. Well-planned selling and marketing campaigns will help the agency reach a more diverse audience. Thus, it is essential to find a marketing agency which will be able to create suitable selling and marketing campaigns.

Owners of real estate agencies must also manage their business cash flow in order to help them achieve their desired level of business profits. They must also pay all costs incurred during the starting of the business. A cash flow analysis will help the owner understand how to best increase profit levels.

Should you require any assistance with your business’s cash flow or any other financial matters which relate to your business, we at Paul Hype Page & Co are able to be of assistance to you. We are able to provide our services related to financial planning. We will work with you to create a financial plan which will allow your business to be in the best possible financial condition.

Licenses Required by Indonesian Real Estate Agencies

There are certain licenses required by Indonesian real estate agencies. One of these is the Spatial Utilization License, which is acquired by realtors to use a particular space for spatial utilization. There is also the Location License, which is issued for the foreign investment companies. This license helps them make investments in the real estate sector. It also allows them to utilize land for either investment or business purposes. The Utilization and Function Plan License allows for condominium development. This license is obtained from the mayor of a city except in the Jakarta region, where it is obtained from the governor. Real estate agencies must also obtain an Environmental License. It is to be obtained by real estate agencies which are carrying out business activities which have an environmental impact. This license controls any adverse effects that may otherwise hit the environment adversely.

Incidentally, many businesses in Indonesia besides real estate agencies require licenses. It may occasionally be difficult and time-consuming for one to undergo all the require procedures and processes which surround a license application. This is where we at Paul Hype Page & Co play our role. We will assist you with settling the details of your license application so that you will be able to place more emphasis on the running of your business, thus leading to increased profits.

The licenses which are provided to the real estate agencies of Indonesia are issued to maintain the safety of the general public, homeowners, and businesspeople. These licenses also provide evidence that a particular real estate agency follows the rules and regulations set by the government.

Starting a Real Estate Agency in Indonesia FAQs

Are foreigners allowed to own a real estate agency in Indonesia?2020-04-02T16:21:32+08:00

Indonesian laws do not allow foreigners to own a real estate agency in Indonesia by themselves; they must do so alongside a permanent resident or citizen of Indonesia. Foreigners may set up a real estate agency under the name of the Indonesian property developer or an agent with whom they will be working. Foreign real estate agents may also opt to obtain a long-term lease.

Are Indonesian real estate agencies allowed to sell land which is located abroad?2020-04-02T16:20:54+08:00

Indonesian real estate agencies are allowed to sell land which is located abroad if it is sold by an agent who is a certified international real estate agent. To become one, a real estate agent must possess the requisite qualifications which are relevant in the global market.

Indonesia-based real estate agency owners must obtain the Certified International Property Specialist (CIPS) certification before they may practice at an international level. To do so, they must receive CIPS training in which they can learn about global real estate practice and learn more about different geographical areas. They are also required to become a member of and receive a license from the National Association of the Realtors.

What difficulties might be faced by one who starts a real estate agency in Indonesia?2020-04-02T16:19:51+08:00

There are many challenges which might be faced by a person who enters the real estate business in Indonesia. Among these challenges are those of making proper investments in the business as well as marketing it to the people who are expected to be the business’s primary customers. Every country has its own individual licensing requirements, as does Indonesia. Indonesian authorities ensure that all real estate business activities are conducted according to the rules and regulations of the country. Despite this fact, many realtors also face certain challenges even if they adhere to the rules and regulations.

Several required licenses may take a considerable amount of time before approval to start a real estate business in Indonesia is received. Foreign investors also cannot hold the freehold property title in Indonesia. They need to involve a permanent resident of Indonesia or start a company of their own in order to set up a real estate agency.

The lack of transparency in Indonesia’s real estate sector often leads to nepotism or corruption. However, the enforcement of anti-corruption and transparency laws have been of assistance in this regard. Real estate startups have also been facing much competition from established real estate agencies in Indonesia as well as their more established foreign counterparts. It can also sometimes be difficult to receive appropriate credit for purchases of property according to the rules which currently exist in Indonesia. For this reason, the government must improve the existing asset-based lending system.

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