Indonesia can be many things to many people. Visitors flock to its lauded beaches and mountain tourism sites, while multinational companies head to the capital, Jakarta, to be part of the booming economic action.
Nice to visit, but perhaps not to live, one might think. Jakarta, it has been said, is a place for hard-core expats - a city troubled by violence, pollution, political unrest and poverty, and rated by Newsweek.com  as the second hardest of all hardship postings, behind only Lagos, Nigeria.
Who would have thought, then, that by the end of this year, Indonesia's largest city - and one of the most densely populated metropolises on earth - would emerge as one of the outstanding prime residential markets in the Asia-Pacific region?
Tim Murphy, chief executive of IP Global, doesn't gild the lily. He says nothing has changed to make Jakarta a more desirable place to live. In the 2012 Global Liveability Survey, Jakarta still ranked 118 of 140 cities, advancing only one place from last year, he notes. However, investment is based on numbers, where Jakarta stacks up.
"Attracted by business opportunities, the number of foreign workers on working visas rose 10 per cent from 2010 to 2011. The number of foreign residents in Indonesia, excluding tourists and foreign emissaries, rose by 6 per cent to 111,752 in 2011," Murphy says.
Why are analysts so upbeat? Because of the city's thriving economy with soaring foreign investments, Murphy says. Gross domestic product growth was 6.2 per cent in the third quarter and IHS Global Insight forecasts 6 per cent growth for this year and next year, second only to China in Asia.
Emerging Southeast Asian cities are leading the charge in luxury residential capital growth, as the latest index from Jones Lang LaSalle shows, and Jakarta is in front by a long way. The firm's data put Jakarta's growth at 19.2 per cent this year, well ahead of Manila (10.5 per cent). Knight Frank is even more bullish: its data put Jakarta's growth this year at 28.5 per cent.
Todd Lauchlan, country head of Jones Lang LaSalle Indonesia, says the city is set to see the strongest price growth for the rest of this year due to solid local demand. "Jakarta has outperformed its neighbouring markets once again this quarter in the high-end residential sector. The market has been fuelled by strong wage and employment growth, low interest rates and high consumer confidence."
John van Oost, managing partner of property asset manager Yishan Capital Partners, says its recent report found that prices in the Jakarta central business district's condominium market rose 16.7 per cent in the second quarter year-on-year, surpassing the national average of 1.2 per cent.
Van Oost cites a recent McKinsey Global Institute forecast that the country is on target to become the seventh-largest global economy by 2030, from 16th today. Indonesia benefited from real GDP growth rate of 5.2 per cent from 2000 to 2010, the third best globally, and its real GDP is now forecast to grow at a rate of 6.5 per cent in the years to come.
"There is little doubt that Indonesia represents a long-term opportunity for global real estate investors in search of portfolio diversification, secured rental income and steady capital gains. However, despite the sheer size of its population of 242 million and its recent phenomenal economic growth, the country is not commonly understood," van Oost says.
Jakarta remains one of IP Global's top tips for 2013, and van Oost agrees. "Indonesia's democratic credentials and favourable long-term economic fundamentals are here to stay," he says. "The increasingly educated and wealthy middle class strongly supports political decisions and investments that improve the country's governance, infrastructure and educational system."
Luxury residences in Jakarta are mostly sold to domestic and foreign investors, not much to owner-occupiers. While this may create localised bubbles, van Oost qualifies that luxury residences "are a sub-segment of the broader residential market, where we see no bubble at all".
As a further indicator of market confidence, van Oost says developers continue to launch luxury projects, usually flashy high-rise apartment blocks with a clubhouse and multiple amenities.
"At Yishan Capital Partners, we strongly believe that the trend in Jakarta is towards the more subdued luxury of smaller apartment and town house projects of 25 to 75 units, with innovative architecture and quality construction. These smaller projects are attracting occupiers willing to pay a premium for design and quality. We intend to launch a number of such projects in 2013," he says.
Murphy agrees there will be demand. "Foreign capital influx brings expatriates who will need high-quality accommodation," he says.
IP Global likes Jakarta's population growth and economic stability, leading to housing demand. Slowing growth in China, and cooling measures in Hong Kong and Singapore, may divert some investors to new investment destinations with good potential, such as Jakarta, Murphy believes.
Van Oost concedes that Indonesia, like all emerging markets, is still full of contradictions and challenges. It requires colossal political determination to execute and finance the necessary investments in infrastructure and mass transport systems, to improve the skills set and productivity of its workforce, and to spread the benefits of its economic gains broadly, he says.
"But looking at the facts, beyond old beliefs, global real estate investors can grasp the still untapped investment opportunities in Indonesia today. The country has changed tremendously over the past 10 years, and it keeps on doing so at an ever-accelerating pace," van Oost says.
What you can buy for US$60,000
A two-bedroom, two-bathroom apartment in the Taman Rasuna building. It has 24-hour security and use of a pool, tennis courts, gym and spa.
What you can buy for US$5.5m
A four-bedroom Menteng freehold property, comprising a four-bedroom house with common rooms, beautiful garden, pool, maid's room and car park.