Falling interest rates, an expanding population and a government-sponsored building boom are turning Indonesia into the world's favorite place to buy property stocks.

Developers on the Jakarta stock exchange, including PT Lippo Cikarang and PT Alam Sutera Realty, have the highest average analyst ratings among global peers and the most buy recommendations of any industry group in Indonesia, according to data compiled by Bloomberg. The Jakarta Construction, Property & Real Estate Index has advanced 26 percent over the past 12 months, twice as much as the nation's benchmark index.

Indonesia's central bank cut borrowing costs in February for the first time in three years, improving the outlook for Southeast Asia's largest economy as President Joko Widodo seeks to lift growth to 7 percent. Singapore's sovereign wealth fund and Indonesia's state pension system are both increasing investments in the nation's property market as Widodo boosts infrastructure spending and the world's fourth-biggest population keeps expanding.