Over the past 2–3 years, after the 2020 pandemic, the real estate market in Bali has been developing especially rapidly. Housing here is still much cheaper than in large resort cities, even though the island has excellent infrastructure, the weather is always nice, and there are many opportunities for outdoor activities. If earlier residences in Indonesia were purchased mainly as a holiday or rental home, then now many people choose property in Bali in order to move permanently. Buyers are mainly nationals of large Asian and European countries, the US, and Russia.
Content:
- Peculiarities of the real estate market
- Key market trends and price dynamics
- Real estate market development outlook
- We will help you buy real estate in Bali
How much does property in Bali cost? Prices vary greatly depending on location, additional amenities, size, number of rooms, and other factors. The most expensive real estate is in popular areas such as Seminyak, Kuta, Uluwatu, and Nusa Dua. Here you can find luxurious villas with ocean views or their own private beaches. The cost of residential properties in such areas reaches several million dollars.
You can easily find inexpensive options in the island as well. Today, real estate prices in Bali in dollars start at about 70,000. For example, for this amount ($73,000), you can become an owner of a duplex 1-bedroom apartment in Canggu. The 43 m² property is located in a residential development built in 2023, 3 km away from the sea (second coastline). Amenities include a balcony, a landscaped garden, a separate entrance, outdoor parking, utility rooms, and a terrace. There is a swimming pool within the development, nearby are cafes and restaurants, a spa, a beauty salon, a supermarket, and a fitness centre. Prices for apartments in Bali have no ceiling: there are both simple and ultra-luxury residences.
The cost of homes in Bali, when it comes to townhouses, starts at about $130,000. This amount can get you a 66 m² apartment with a garden view, close to the beach, and coming fully furnished and with all amenities. The cost of houses in the island also starts at $130,000 to $150,000.
For those looking for commercial property, there are many options. For $3 million, you can buy a 2,000 m² beachfront hotel and residence with 18 rooms and 2 swimming pools, surrounded by coconut and mango plantations. According to local regulations, you can lease it for up to 100 years in your name or a company you own.
In general, the local real estate market is stable and attractive to investors for several reasons:
- Still affordable prices. The average cost of residential and commercial properties is much lower than, for example, in Thailand or Hong Kong. You can find real estate options for any budget.
- Growing tourism and rental demand. Bali is one of the most popular resorts. This creates a demand for rental properties all year round. In 2022, over 2 million travellers visited the island.
- Beautiful nature and unique culture. This makes the area attractive to tourists and expats, who want a one-of-a-kind living experience here.
- Comfort. The island has a well-developed infrastructure with good roads, restaurants, shops, and healthcare facilities.
Experts project that until 2027, the Indonesian real estate market will grow by 10% every year.
Peculiarities of the real estate market
Before making a purchase, foreigners must consider the legal restrictions on the ownership of Indonesian real estate, namely:
- Overseas nationals are prohibited from acquiring land in Bali. However, it is possible to buy long-term lease rights (Hak Pakai), which is usually up to 30 years and can be extended for another 20 years. There are also options for co-owning property with an Indonesian citizen or entity.
- Foreigners cannot purchase real estate on land owned by the state or the Indonesian population. However, they can buy properties built on private land or territory owned by an overseas company.
In any case, when buying residential units or commercial space, foreign nationals have decent options to address this issue. The procedure itself for acquiring real estate cannot be called complicated—it is standard and not much different from buying a home in any other country. It is worth noting that a large percentage of housing in the island belongs to foreign investors. Many buy villas and apartments as a second home. As for rentals, they are very popular, especially in tourist areas. Many owners prefer to rent out properties short-term.
Officially, the rental yield in Bali is about 8 to 9% per annum. However, for comfortable properties in popular tourist locations, these figures are much higher and can reach up to 15 to 20%, with an occupancy rate from 75% per year.
Key market trends and price dynamics
Indonesia is slowly but surely turning into a new economic hub in Southeast Asia, making investors from all over the world invest. In 2023, Bali became the second most attractive tourist destination according to the popular TripAdvisor website.
In terms of GDP, Indonesia ranks 16th in the world. The country’s economy is isolated from external trends and remains stable year after year. It is one of the fastest growing economies in Asia and allows the state to develop rapidly. Thanks to the stable political situation and large commercial projects, Indonesia is attracting more and more overseas investors. There are constant changes in property prices in Bali. Every year they go up by about 20%.
Real estate market development outlook
With Bali closed for 2 years due to the pandemic, thousands of people who had been long waiting to visit the island started buying tickets after the authorities announced that anti-COVID restrictions were lifted in February 2022. This created a huge demand for housing. The dynamics of property prices in Bali has become stronger after the crisis. Demand jumped sharply, which led to a rapid increase in prices in March 2022. Rent has risen by 50%.
Interest in real estate in the island continues to grow, which inevitably leads to further rise in prices. This means that local property owners can expect a significant increase in rental income in the near future. Today, Indonesia is visited by high-income tourists with the average cost of living of about $4,000 to $5,000 per month. In addition, the country’s government is developing various programmes for foreign investors who are able to attract more funds and contribute to the growth of the development market. These initiatives include the issuance of long-term visas, the possibility of obtaining title to land, and other privileges.
The climate, culture, relatively low cost of living, and potential returns make Bali an attractive destination for expats and investors. Given the constant growth in tourist flow and government support, we can say the outlook for the Indonesian real estate market is very encouraging.
We will help you buy real estate in Bali
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