Foreigners hoping to buy an apartment in Indonesia – something not allowed under a 1960 law – may finally be able to do so before the year is out.

Coordinating Minister for Political, Legal and Security Affairs Luhut Pandjaitan told reporters on Wednesday that new regulations are being finalised and should be completed next month.

Liberalising the property sector would be one of the reforms that “would make our economy boom”, Luhut said, adding that some property agents have reported getting more inquiries.

Under a 1960 Agrarian Law, foreigners are not allowed to own homes in Indonesia, Southeast Asia’s biggest economy.

Early this month, Luhut had said property sector reforms are needed in order for the country to attract foreign investors.

President Joko Widodo is expected to issue an emergency law – known as a perppu – next month. The perppu, which takes immediate effect, will allow foreigners to purchase an apartment, but not landed houses.

Luhut said on Wednesday: “We are actually copying from Singapore and Malaysia, but with our own formula that fits the conditions here.”

Noting that the price gap between apartments in Singapore and those in Indonesia is huge, Luhut added: “This is a good opportunity (for Indonesia).”

Analysts say the liberalisation of the property market in Indonesia, together with the government’s recently launched tax amnesty programme, will boost property prices in the country.

Under the programme, the government offers wealthy citizens with hidden assets abroad a one-time blanket pardon and discounts for tax evaders who come clean about their assets,

The move, it is hoped, will allow billions of dollars to flow back into the country – and presumably some will be channelled into the property sector, fuelling economic growth and creating jobs.

However, there are concerns about the social impact this will have on low and middle income Indonesians who may be priced out of the property market as prices are bound to rise.

“If, let’s say, foreigners are allowed to buy apartments worth 5 billion rupiah (US$38,127) or above, this would still affect lower-priced homes,” a Jakarta-based equity analyst with a foreign brokerage told The Straits Times.

“Those priced at 1 billion rupiah would immediately increase to, probably, 1.2 billion rupiah,” said the analyst, who cannot be identified due to company policy.

This would impact the home affordability for average Indonesians, the analyst added.

Indonesia’s housing ownership backlog is currently very high – at 13.5 million in 2014, according to the latest data from Indonesia’s central statistics agency.

Property agent Ratih Ratnawulan said she has noticed a higher number of inquiries since the Hari Raya break earlier this month after seeing a very quiet property market for almost two years.

“Most callers were keen on houses with prices around 2 billion rupiah and lower,” said Ratih, who is with Era Radiant property agency, located just outside Jakarta.

“Hopefully, I will be able to close at least one deal this month,” she told The Straits Times.

(US$1 = 13,123 rupiah as of 7/22/2016 via oanda.com)