The relatively low interest rates and the availability of more innovative mortgage products have helped give a big boost to activities in the property sector. At the same time, of course, the national economy has also picked up its growth pace resulting in stronger consumer purchasing power. As a result, the housing sector is set to record strong growth in 2008. Indeed, the strong demand for housing is already being reflected in the rapid growth in mortgage lending. In addition to residential property, the Central Business District (CBD) in Jakarta has excellent prospects. Note that property in the CBD is still valued at about 50% of its pre-crisis level in US dollar terms. It is also cheap compared to the properties in the key business districts of its regional peers. While evidence of a building boom in apartments and office construction is evident in Jakarta, other regional cities such as Surabaya, Medan and Bandung are also experiencing a property renascence.

Currently, Indonesian law does not allow foreigners to buy property, leaving investments in the sector only possible through share purchases in listed property firms. In one recent purchase, Kuwait Investments Pte Ltd bought a 15% share in PT Perdana Gapuraprima at its IPO in early October. The Kuwait investment vehicle paid $16.5 million for the stake, with officials of the property company stating that the Kuwait firm was interested in increasing its shareholding.

Perdana Gapuraprima is just one of a number of major property companies, in a sector led by PT Lippo Karawaci, PT Ciputra Development, PT Total Bangun Persada and PT Duta Pertiwi. All are listed companies.

In tourism, Indonesia has a remarkable wealth of destinations, led by the island of Bali, which consistently continues to win awards from leading industry publications. Other tourist destinations include Lombok in West Nusa Tenggara, Yogyakarta and Solo in Central Java, Lake Toba in North Sumatra, Tanah Toraja in South Sulawesi and the Bunaken marine park in North Sulawesi. Bintan Island in the Riau Islands province serves as a convenient resort destination for visitors from Singapore. Such destinations are becoming increasingly popular with foreign tourists, while, at the same time, domestic tourists are also becoming an important part of the high-end industry.

In 2007, the number of foreign tourist arrivals to Indonesia rose 13.02% year-on-year to 5.51 million. Notably, tourist arrivals at Indonesia’s most popular tourist destination, Bali, are continuing to show signs of strong recovery. The number of foreign tourist arrivals to Bali rose by a healthy 31.96% in the year to 1,666,079.

In addition to its well-established tourist destinations, Indonesia possesses a wealth of other attractions that are ripe for development. These range from eco-tourism projects in dramatic, forested ecosystems such as West Sumatra and Kalimantan to marine tourism in any number of pristine areas of the country.

The natural friendliness of the people and a tradition of respect for visitors make any of Indonesia’s provinces fertile ground for the development of tourism and many already have good communication links in place awaiting for well-planned developments.