Batam offers Stability and Growth for Real Estate Investors
Batam is undergoing a major economic transformation. The Indonesian government is working on key infrastructure projects which are helping to attract foreign investments into Batam particularly in the manufacturing, shipping, and digital park sectors.
The planning and development agency for the Riau province is projecting economic growth for Batam to be in the 5-7% range between 2023 and 2026, making Batam a captivating case for property investors to invest in the economic potential of the region and Batam itself.
Since 2020, Batam’s residential property market displayed excellent tenacity and prices have remained steady in this inflationary environment. This makes Batam properties a resilient buy with stable rental yields that can withstand any potential future economic uncertainty.
This was a major motive for Tuan Sing Holdings Limited, a listed Singapore developer, to invest in Batam through their 125 hectares Opus Bay mixed-use township project.
Phase 1 of the development includes Cluny Villas, a community of luxurious resort-style villas, is seen to be completed from the 4th quarter of 2023 onwards. Meanwhile, the Balmoral Tower which features high-rise residential apartments with sea-front views is expected to be ready by the 4th quarter of 2025. Entertainment, retail, hospitality, F&B, and tourist attractions are also in the works to complete the Opus Bay township.
Exterior of Cluny Villas– Artist’s Impression Only
Batam is one of the most affordable cities to live in. It offers convenience for professionals who are on a hybrid or work-from-home setup. Entrepreneurs can also launch their startups here without being hampered by a high cost of living.
A highlight of the Opus Bay project will be a privately owned ferry terminal that will serve the residents and visitors of Opus Bay to ensure consistent and convenient accessibility between Singapore and the township with a mere 40-minute ferry ride from the Singapore HarbourFront Ferry Terminal.
At the same time, Batam’s proximity to Sumatra and Jakarta offers Indonesians the opportunity to experience Opus Bay’s high-quality lifestyle.
Batam Property Market’s Attractive Rental Returns
Interior of Cluny Villas– Artist’s Impression Only
However, gross rental yields do not tell the full story. Compared to Singapore, transaction costs to a buyer buying a property can reach up to 39.3% compared to only 7.7% in Indonesia. If you are buying an Indonesian property to invest and rent, you will only pay 20% taxes of gross income from it, while in Singapore it is 22%, and in Malaysia, 30%. So, if you are looking for positive cash flow returns, Batam properties would be a far superior alternative.
Massive Potential Capital Gains for Batam Property Investors
Batam’s property market is set to benefit from the influx of investment into the area. With a strategic location and excellent connectivity to three major leading cities: Singapore, Jakarta, and Kuala Lumpur, the region attracts many foreign and regional businesses.
Singapore is a major investor in Batam
Since Batam is a special economic zone, apartment units can be owned by foreigners. This remains a primary driver for the rapidly growing Batam property market, with new property developments including new hotels. The Indonesian government also produced a Second Home Visa program to attract more investors and entrepreneurs into the country. With a second-home visa, foreigners can live in Indonesia for 5 or 10 years.
These developments ensure that property investors can profit significantly through capital gains if they choose to sell their property in the next five or six years.
Overall, Batam’s property market comes attractively priced given current favourable exchange rates, a strong projected growth and demand trend, and attractive rental yields.
Contact our Singapore-based Batam property investment consultants today to learn more about investing in Batam! You can also schedule personalised 1-1 tours of Batam, with visits to newly launched sales galleries from reputable Singapore developers. Attractive special incentives also apply for group familiarisation trips. Sign up now!