Bali Real Estate: How Viable Is Property Investment?

We have all heard about “Invest in Bali Real Estate!” , and this is not without a reason as these enticing words are supported by quite solid layers of facts. For the past 15 years, Bali has been one of Asia’s best performers. This is also supported by the fact that the prices for Bali Real Estate and Property have seen the increase of 15% year over year (YoY). Vacant land prices in Bali are also naturally increasing over time and they are still among the top in the world!

Bali Real Estate Profits 15% Year Over Year (YOY) – Truth or Myth?

Tax Office Documentation Of Land Tax and Price (Notice the land appreciation price in red box)

bali real estate

The fundamentals of Real Estate and Property are based on supply and demand and Bali as it is, has been one of the top tourist island destinations on Earth. Bali has been and still is the destination that is sought after by commercial investors as well as individual investors since the demands are on the steady increase.

Understanding Supply and Demand of Bali Real Estate & Property

Facts regarding demands in Bali Real Estate & Property

1) Tourist Accommodations – Opening of new resorts have never quite stopped. What this means is that commercial investors are always looking to develop resorts or hotels and they have been purchasing lands for supply to this target segment. This fact is also what has helped the prices to keep on increasing!

2) Alternative Accommodations for Tourists – Ever since the advent of Airbnb, tourists are now looking for non-traditional accommodations and are in the lookout for villas that can offer what 5-star resorts offer! The reason behind this is because villas allow the guests or tourists the luxury of private pools and bigger spaces with the service level comparable to what 5-star resorts can actually provide.

3) Long Term Residents – Companies are now going online and pursuing digital marketing and this drives many remote workers to relocate to Bali! Why is that? The reason behind this is because having an all-year round tropical weather as well as affordable living standards within an island paradise is a dream that most professional millennials are after! This fact is also the main contributor to the steady increase of the amount of accommodations, most especially in Bali. Types of accommodations include hostels, boarding houses and co-living spaces throughout the island of Bali.

4) Retirement Visa Residents – Bali allows foreigners with a long-term retirement visa to be on the island and this is open for any individuals over the age of 55 with a certain set of qualifications. This fact also allows for the residents to stay on the island a whole year and they can always have this extended for 5 additional years afterwards.

Bali real estate

Facts regarding Supply in Bali Real Estate & Property

1) Building Restrictions – Bali is one of the places that you can find in the world that have a maximum building height restriction. The main reason for this is because the people in Bali are quite the religious type! Traditional Bali residences should not be constructed higher than the temple. However, this particular restriction is also what makes Bali stands out as an island. This is also what will make Bali to never feel like a cosmopolitan city with high-rise buildings!

Indonesian government continues to enforce this restriction and they make sure that the maximum height limit is 15 metres or even 12 metres in some regions. This restriction had resulted in quite a pickle and impacted especially commercial real estate investors as they have to acquire a wider land space for their resorts as they are unable to stack floors upwards so they will need to expand horizontally to accommodate their ideal number of rooms.

The only building that goes into the list of the exception is Grand Bali Beach Hotel. This hotel was built in the 60’s and has reached 10 floors! This exception was made because it is owned by the government and was constructed to host a world event back in the day.

2) Area / province development – Areas that see the most development are the ones that are sited around tourist areas. These areas include the western part of Bali. They are Kuta, Seminyak, and Canggu. Just a tiny bit of spoiler, Canggu is currently the hottest venue all around Bali!

Now, the demand of properties that are close to the beach have created such a hype, and therefore, it only makes sense that Real Estates close to the airport and the beach are the main forces driving the prices upwards.

Indonesian government is planning to build a domestic airport up north of the island of Bali and they are currently investing their time and money to develop more accessibility by kickstarting the construction of wider and better roads to the northern part of the island.

Bali Culture

Area Of Preference

Location is always the primary aspect that will never be overlooked when it comes to Real Estate & Property investment. This is because each and every land on earth are never quite the same! This is pretty much why investors are eager and prepared to invest more than the average!

Beachside, cliffside, riverside; all of these lovely places are (unfortunately) few and far between! So, it’s only natural for those that are looking to for these places to invest as much money as they can as the scarcity of these places can drive flocks of people to come!

Prices in Real Estate & Property is quite a subjective topic. As such, the latest price that was transacted should only be the reference for benchmark and not a point of comparison.

Now, coming back to Bali, Kuta and Seminyak are two of the most developed areas perfect for tourists in Bali.. These areas are very well-developed and the fact that they are close the airport, the surf-friendly beaches are only enhancing their already strong strategic location high-ground!

However, as what they always say, there’s always a bigger fish in the sea and Canggu is becoming even more developed each and every day. Canggu is located just north of Seminyak and since Seminyak is already growing very rapidly, Canggu, being quite close to Seminyak, naturally gains popularity over time. Rice fields are all over Canggu and this can be a very much-needed uniqueness for people who really want the feeling of being in the Countryside of Indonesia.

Now, into the Southernside of Bali. This part of Bali is quite famous of its being the area for the “Rich”. Southernside of Bali is divided into Uluwatu, Jimbaran, Bukit, Tanjong Benoa and Nusa Dua..
Nusa Dua is where the world’s finest high-end resort such as St Regis, Mulia, Sofitel, and Hilton reside. These areas typically have cliffs and are located close to the beach which allows resorts and properties to enjoy the unique view of the horizon.

Family-Oriented area – Now, for those looking to build families, Sanur has always been the top choice for families residing in Bali. Those who would still like to be around the main attraction of Bali but still also require and value privacy might just find Sanur to be the perfect place for them. Sanur is located close to the town of Denpasar, the city center with shopping malls and Gandi; a very well-known Private School. Those that live in Sanur can also have multiple non-tourist dining choices and a child-friendly beach with waves that are not quite as strong as the west coast.

The wellness, artistic, hippy area – Have you watched the movie “Eat, Pray, Love”? Well, this movie is pretty much the main contributor to the popularity of Ubud. Ubud attracts those that are looking for wellness retreats, artistic inspirations, and the unique pleasure of waking up next to rice fields.

These are all the main points you will need to know about Bali Real Estate & Property investment! So, if you require further assistance in Bali investment, drop us a call!

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