Foreign interest in property in Bali is booming right now.
The demand for villas, apartments, commercial buildings and land on the island by international investors, expats and developers is seeing prices skyrocket.
Research conducted by Indonesian-based property company Rumah123 shows that there is an unprecedented increase in demand for property from foreign nationals, especially in the Badung Regency area.
Bali is governed by nine regencies: Badung, Denpasar, Tabanan, Gianyar, Bangli, Buleleng, Klungkung, Karangasem, and Jembrana.
Badung Regency is home to the highest concentration of tourist attractions, resorts, and facilities. It comprises resorts like Kuta, Legian, Seminyak, Canggu, Jimbaran, Uluwatu, and Nusa Dua.
Rumah123 has revealed that international demand for properties and land in Badung Regency has grown by 92%. Other areas have also seen significant growth, including Denpasar, where interest is up 81%, followed by Surabaya in Java, up 49%, and North Jakarta, also up 46%.
Speaking at a panel discussion, the Head of Research at Rumah123, Marisa Jaya, explained, “Rumah123 notes that the growth in demand for property from foreigners in 2023 experienced rapid development compared to 2022.
“The potential of the foreigner market is expected to accelerate the growth and progress of this industry even better in 2024.”
Despite huge growth, looking at figures nationally for Indonesia, South Jakarta is still ranked as the number one spot for foreigners in Indonesia. The Central Business District of the capital city is a favorite for city-slicking expats.
However, many still choose to fly into Bali just for the weekend.
The demographics of the forge in investors searching for properties in Badung Regency and Bali more broadly make for interesting reading, too.
In 2023, foreigners looking for property in Indonesia were mostly from Singapore, the United States of America, Australia, Malaysia, and Japan.
Jaya explained that policies, including the Golden Visa policy, have made it easier for foreigners to invest in property in Indonesia.
However, she noted that more policy changes could help open up the market further. She explained, “If the relaxation of policies and regulations set by the government is implemented consistently at the general and regional levels, foreigners receive sufficient [communication about changes].”
“This will stimulate a positive market response and support the growth of the national property industry in the future.”
Yet, there are an increasing number of people in Bali who are opposed to and critical of this huge development boom.
Leaders, including Ex-Deputy Governor Cok Ace, have called for serious spatial planning assessments to be completed as soon as possible and for existing legislation on property development to be implemented to the letter.
Hoteliers and travel stakeholders have noted that by 2025 resorts like Canggu risk having too many hotels to keep up with demand.
This runs the risk of economic collapse and a mass exodus of businesses from the area, leaving behind a ghost town resort that just ten years ago was still a quaint coastal community dependent mostly on agriculture and community-based tourism connected to surfing.
Local activism groups like Stop Uluwatu Destruction regularly petition online and share footage of developments they’ve observed destroying not only the area’s natural landscape but also negatively impacting local culture.
Like Canggu, Uluwatu has undergone a rapid transformation from a quiet local village and farmland to a booming tourism resort.
The area, now referred to in the tourism sector as Uluwatu, spans the Pecatu area, which is the southwestern portion of the Bukit Peninsula.
For decades, this part of the Bukit Peninsula was totally overlooked by tourists, and it was visited only by intrepid surfers who made the journey to experience for themselves the ultra-challenging Uluwatu break.
Footage shared recently by the Stop Uluwatu Destruction group illustrates the conflicts the island is facing more broadly as tourism development booms.
In the video, local resident Eva Kandra shared her deep distress that construction crews building a huge resort next to her family home and temple refused to stop noisy building work even just for a few minutes during the recent Kuningan festival so that the family could worship in peace.
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Chris
Friday 29th of March 2024
Russians are very smart, they are good in Math's, They are doing the same thing in Thailand buying up properties left and right, would you believe it, that Russians are the number 2 buyers of luxury condo in Thailand after chinese, like no other Europeans or Americans are doing this.
I did a deep dive and found out, Russia has more luxury cars than Dubai/UAE, most are software programmers, they have a very good education focused on Mathematics.
No wonder they were superpowers, I have worked with them, they are a high trust society, respect women, family oriented, if they could do this when Russia is in turmoil, imagine what Russians could do to Bali on their good day.
Wayan Bo
Thursday 28th of March 2024
Implementation of Bhutan’s and Galapagos touristic regulations could be possibility to save and recover our beautiful island from slum architecture 🤣
Hns
Thursday 28th of March 2024
And the normal local people can’t buy a house anymore. Within a couple of years we see “villages” on the beaches were the local people must live.
Exp
Wednesday 27th of March 2024
There is nothing more lucrative for the local big wigs than converting rice field into land for businesses or luxury villas developed by foreigners.
Shorty
Wednesday 27th of March 2024
Maybe not a good thing, and possibly detrimental in the future.
A large % of this investment is in hotels, rental villas, condos..a market where existing and under construction rooms far exceed existing or projected tourist numbers. The same applies to commerce, particularly hospitality and retail.
It places huge demand on the services infrastructure which struggles to keep up with existing demand.
We're all aware of the traffic problems.
Water and sewage are the big sleepers. Much of this new development will have bores draining on the finite aquifers. Development near the coast is already seeing salination from the rising water table. Also contamination from septic tanks.
The human side. Rising land and housing prices are forcing people to live further from their employment. Excessive travel time, renting remotely..all put what should be unacceptable pressure on finances, and families.
Productivity and self sustainability. As more and more agricultural land is converted, farm produces reduces. It's exacerbated as many younger people are not interest in farming. Dad retires, the land is sold/leased to fund the retirement or buy kids a job. The land remains fallow. In many cases this causes the collapse of the local subak, so other productive land is lost.
Robust enforceable zoning is needed. It's unrealistic and not possible to make all of Bali a tourist destination. Why not create exclusion areas that are needed for sustainability? The laws and regulations governing foreign ownership should be made more stringent, Particularly in the hospitality area.
Final approvals on major foreign funded developments should be taken from the Regencies and given to something like the Australian Foreign Investment Board.
Finally.
Given tourist numbers, apart from initial employment and supplies new hospitality development contributes bugger all to the economy. It just makes smaller cuts of the cake. The same for expat private dwellings.
The Golden Handshake? Bali Sun I'm amazed you and the people behind the article could even suggest it's a contributing factor. Anyone with that wealth, looking at the parameters, would say 'You must be joking'. Most of the benefits are available at a fraction of the cost through other visas.
Shorty
Saturday 30th of March 2024
@Hns,
Yes, but as I posted it's meaningless without enforced regulations and sanctions.
Hns
Thursday 28th of March 2024
@Shorty, wasn’t that what they meant with sustainable and environmental friendly tourism?