Indonesia’s property market is expected to enter a transitional phase in 2026, shaped by shifting demand, sustainability priorities, and a growing focus on long-term resilience. As economic activity continues at a relatively strong pace, developers and investors are being urged to adopt more selective and adaptive strategies to remain competitive.
According to Knight Frank Indonesia’s Property Outlook Survey, conducted toward the end of 2025, the sector is projected to remain on a growth path, albeit at a more moderate pace. The survey gathered insights from key industry stakeholders to assess market prospects, emerging trends, and potential challenges in the year ahead.
About 61% of respondents expect measured investment growth in 2026, citing constraints such as weakening purchasing power, inflationary pressures, and rising land prices—particularly in prime locations. Despite these challenges, certain subsectors are forecast to outperform the broader market.
Industrial estates and warehousing are expected to remain the primary growth drivers, supported by logistics expansion and manufacturing demand. Other segments—including landed housing, retail, hotels, and rental apartments—are projected to post stable performance. Meanwhile, offices, resort villas, and strata-title apartments are likely to continue facing headwinds and remain relatively stagnant.
Developers, however, show broader optimism beyond logistics-related assets. Hotels and rental apartments are increasingly viewed as promising segments in 2026, supported by the continued recovery of tourism and growing demand for flexible living arrangements.
Senior Research Advisor at Knight Frank Indonesia, Syarifah Syaukat, emphasized that evolving lifestyles, technology adoption, and sustainability will play a decisive role in shaping property trends next year.
“2026 will be a period when developers must be more perceptive in reading market needs. Mixed-use developments near transit-oriented developments (TODs), landed housing in suburban areas, and retail transformation will be key strategies to maintain project attractiveness amid changing consumer behavior,” Syarifah said during a recent media gathering, as quoted by propertynbank.
Knight Frank also highlighted several trends expected to gain momentum in 2026, including the expansion of padel courts, green data centers, warehouse developments, and ongoing retail transformations. Lifestyle-driven sectors—such as e-commerce, renewable energy, tourism, and food and beverage—are seen as having a positive multiplier effect on national property growth.
From a regional perspective, Greater Jakarta (Jabodetabek), Bali, Surabaya, Semarang, and Makassar are projected to offer the strongest property growth potential. Knight Frank Indonesia Country Head Willson Kalip noted that market resilience remains evident, reflected in the increasing penetration of green office buildings, revitalized retail spaces, and sustained demand for warehousing.
On a broader scale, Knight Frank Asia-Pacific Head of Research Christine Li pointed to the “China + Many” strategy as a key factor influencing investment flows, with Indonesia increasingly emerging as a secondary or tertiary base for regional operations.
Despite ongoing challenges, Indonesia’s property market in 2026 is expected to continue growing, with strategies increasingly anchored in sustainability and genuine market demand.
Source: propertynbank.com
Photo Credit: Getty Images
