For the middle and longer term, Indonesia’s property sector is promising. One reason being that property prices in Indonesia are still among the cheapest in the Southeast Asian region.

When we look at the price per sqm to purchase an apartment in the CBD of Jakarta compared to purchasing in other CBD's around the region, we find that Jakarta is significantly discounted - see above picture.

But let’s compare apples to apples. We all know how advanced and expensive the property markets are in places like Singapore and Hong Kong with property prices rocketing beyond the reach of even many wealthy bankers. When we look at more comparable cities to Jakarta such as Hanoi and Bangkok, we see a 20% and then 55% price discount that Jakarta holds (www.numbeo.com).

One reason for this is after the devastation of the 1997-98 crisis, Indonesia is coming off a low base and property still looks reasonably affordable compared with other emerging Asian nations. Investors are attracted to the low price entry point that Indonesian real estate offers.

Despite concerns of the current soft property conditions, optimism remains that over the middle and longer term the below key factors will continue to drive the market.

• Large population growth with a rapidly expanding middle class
• Urbanization and higher living standards will contribute to property demand
• Indonesia will remain underpinned by buoyant domestic buyers’ market
• New infrastructure such as the MRT, LRT and Outer Ring Roads (JORR 1 & 2) will help enhance the value of existing and under-construction projects