“Real” has the meaning of the word royal or royal while estate means land. In other words, real estate means immovable property in the form of land, natural resources, and buildings.
The real estate industry is important because it can attract and stimulate activity in various economic sectors, influence the development of the financial sector and affect economic growth and employment.
Real Estate in Developing Countries and The Impacts
Economic growth in developing countries has finally encouraged investors to buy luxury real estate there. Smart investors do not buy real estate just like that, they have to be smarter at seeing the development of luxury properties in developing countries because before buying a property, they must first study the location and future business prospects.
The constant growth of Internet technology in emerging markets is feeding real estate the adaptation of Internet tools in marketing and business development activities. Kian Moini, Founder and CEO of Lamudi said: “The number of property enthusiasts, either selling or buying, is enough to add to developing markets. A real estate agent must quickly adjust to customer expectations and demands.”
Lamudi Co-founder and CEO Kian Moini said the tourism industry has driven the development of large real estate properties around the world. With more and more tourists visiting Indonesia, other developing countries such as Sri Lanka and Mexico are also expanding their infrastructure to attract more visitors.
Moini said emerging markets continue to offer new travel destination options as tourism in these countries becomes more affordable compared to more developed countries. As a result, property developers have had to adapt and create new projects to meet demand.
Real Estate in Indonesia
In 1974, the Indonesian government officially began to regulate real estate as an industry ready for development. The real estate business is all the processes of procuring, supplying, managing, and constructing land. Real estate is also growing rapidly in Indonesia, impacting the country and also being an indicator of the state of the national economy. Real estate is expected to continue to play an important role in efforts to improve the economy because real estate can adapt to the demands of the world community and the times.
Current economic developments have influenced the development of companies going public in Indonesia, thus having an impact on the development of the capital market in Indonesia. These developments require every company that goes public to prepare financial reports and reports that function as a medium of communication between company management and external parties. Therefore, even though the real estate sector is also experiencing competition as well as a big decline in interest. This business is needed to help the progress of a country such as real estate in Bali where Bali is the center of tourism from Indonesia which certainly needs help from the real estate business to advance tourism there. Likewise with areas that have good potential to be used as tourism spots.
Real estate is expected to continue to play an important role in boosting the economy, considering that the Indonesian real estate sector has survived quite well from the onslaught of the COVID-19 pandemic to the second phase. The Indonesian Ministry of Industry hopes that industry players will participate in difficult times when the Indonesian economy experienced a slump during the pandemic. The real estate industry is a major employer and has the potential to accelerate economic recovery during the pandemic.
According to Epic Property Observer Gali Ade Novran, one of the clearest indicators in the real estate industry is the continued growth in house sales, including the sale of bank house equity (KPR). In addition, the real estate industry is encouraged to continue to make a positive contribution to providing livable housing.
Regarding the perception of global market players towards Indonesian investment, which also affects the stability of real estate in Indonesia, global investors are more focused on real estate investment in developing markets than in less developed markets. With increasing domestic and international investment, not only the real estate sector but also the construction services sector is starting to improve.
Rapid digitalization during the pandemic had a very positive impact on the real estate industry in Indonesia. The proof is that the real estate industry, particularly the players in the housing sector, has started offering consumers homes. Several large developers in the east and west corridors of Jakarta are busy completing their projects. This innovation applies to marketing with digital services, eliminating the need for buyers and sellers to meet face to face, and also providing convenience and ease of transactions in working with bank customers.
JLL Indonesia Country Head James Allan said infrastructure development, which is still a priority for the government, has positively impacted property development in other big cities in Indonesia.
By: Anzalina Salsabila
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