Top Cities for Property Investment in Indonesia 2025

Indonesia is Southeast Asia's sleeping giant in the realm of real estate. With strong economic growth, a rising middle class, and increased foreign interest, 2025 is shaping up to be a pivotal year for property investors. According to Bank Indonesia, the national property price index rose by 3.5% year-on-year in Q1 2025, with further growth expected. But not all cities are equal. Here's a breakdown of the top cities in Indonesia that offer the best returns and growth potential.

1. Jakarta

The capital remains a powerhouse. Despite its congestion and urban sprawl, Jakarta's commercial and residential markets are rebounding post-pandemic. Infrastructure projects like the Jakarta-Bandung high-speed rail and ongoing MRT expansions are making the city more accessible and investment-worthy. In 2024, the average residential rental yield in Jakarta's CBD stood at 6.2%, among the highest in the region.

Why invest: High rental yields in central business districts (CBDs), strong demand for apartments and mixed-use developments, and robust infrastructure upgrades.

2. Surabaya

Indonesia's second-largest city is booming with industrial and commercial development. Its port and manufacturing sectors are thriving, and the city is undergoing rapid modernisation. Property prices have increased by 4.1% annually, according to the Ministry of Public Works and Housing.

Why invest: Affordable property prices, solid infrastructure, and a growing population driving housing demand. The city's strategic location as a trade hub supports long-term growth.

3. Bandung

A tech and education hub, Bandung is attracting startups, students, and digital nomads. The high-speed rail link to Jakarta will slash travel times from 3 hours to just 40 minutes, turning it into a commuter-friendly city. Bandung recorded a 12% rise in new property developments in 2024.

Why invest: Rising demand for condos and co-living spaces; tourism and digital economy support short-term rentals. Strong government support for smart city initiatives enhances long-term prospects.

4. Bali (Denpasar, Canggu, Ubud)

Bali remains a favourite destination for vacation homes and short-term rentals. Post-COVID tourism recovery and remote work trends are pushing demand, especially in areas like Canggu and Ubud. According to AirDNA, occupancy rates for short-term rentals in Bali reached 72% in 2024.

Why invest: Strong short-term rental returns, growing expat population, and lifestyle-driven demand. Digital nomads and retirees are fueling demand for mid-range and luxury properties alike.

5. Makassar

Eastern Indonesia's largest city is becoming a trade and logistics hub. Government investments in the Trans-Sulawesi network and port expansion are boosting its profile. Property prices are still 40-50% lower than in Jakarta, offering strong appreciation potential.

Why invest: Early-stage market with high upside potential, relatively low land prices, and improving infrastructure. Strategic position in the Indonesian Economic Corridor.

6. Medan

As Sumatra's biggest city, Medan is a key commercial center with strong ties to Malaysia and Singapore. Retail and hospitality sectors are expanding fast. Residential demand has been growing steadily, with a 5.8% increase in transactions recorded in 2024.

Why invest: Cross-border business ties, rising consumer market, and increasing urbanization. Infrastructure upgrades such as the Kuala Namu International Airport expansion add to investment appeal.

Final Thoughts

Indonesia's property market in 2025 is full of opportunity, but smart investors focus on cities with infrastructure growth, economic activity, and lifestyle appeal. Whether you're targeting rental yields, capital appreciation, or long-term plays, these six cities offer a strong starting point. Backed by national trends and localized growth, these areas are set to lead the charge in Indonesia's property investment landscape.