Despite or perhaps because of the massive boom in construction, house prices in Jakarta have been enjoying only modest rises. Residential property prices increased by just 5.40 per cent and actually fell by 1.24 per cent in real terms. The house price index is still in the region of 50 per cent below its peak. However, the biggest deterrent facing foreigners hoping to buy land or houses is that while they can legally own condominiums or strata-title residential property (although no foreigner has actually received a strata title certificate of ownership since 1996), they are not allowed to own land. That said, in practical terms, foreigners can often receive rolling lease contracts which frequently come with an assurance that should the legal situation change they will become titled.
The vast majority of the construction work currently ongoing in Jakarta is based around new development, and renovation has very much taken a back seat. It is a particularly unattractive option for foreigners given the taxes applicable on resales, and the fact that foreign ownership is not permitted.
The brave few who do decide to renovate a unit should remember that Jakarta is at present the third most polluted city in the world and with about 50 per cent of the houses missing usual ventilation, re-builds on older houses will involve a substantial outlay to bring them up to standard.