During the height of the pandemic in Bali, homeowners were struggling to rent out their usually fully booked rental properties. With borders closed and industries on lockdown, many rental property owners drastically dropped their prices hoping that some income would be better than none.
Still, as borders reopened in February this year, landlords left rental prices at base rate, often even lower. But as Bali has irrefutably committed to its sustained economic recovery, rising fuel costs, and the cost of living crisis, landlords have hiked their rents as high as they can.
The issue is causing problems for local renters, as well as international workers from across South East Asia, and is flustering the feathers of many digital nomads and remote workers who moved to Bali thinking they could live more affordably.
Speaking to reporters, Maria, who is a refugee from the Philippines, explained that she is being priced out of the market by Bali’s rising rental prices. She shared that when tourists returned to Bali, especially Canggu, she saw prices skyrocket with little notice.
During the pandemic, she had been paying IDR 2.8 million (USD 180) monthly for a hotel room in a resort in Bali. But overnight, the hotel owners raised the room rate by a whopping IDR 400,000 (USD 25). A 14% increase is a huge amount of money for someone in Maria’s position.
She told reporters, ‘Now I’m staying in a tiny room near Denpasar with no air conditioning. It’s all I can afford. During the pandemic, many hotels like the one Maria was staying at changed their services to a long-term rental model rather than offering traditional hotel services.
Naturally, as soon as borders reopened, businesses had to try and rapidly recuperate the costs of the losses of the lockdown. Hotels like the one in Canggu dropped their usual room rates by 50% or even 75% in some cases and offered accommodation on a monthly basis.
The rise in rental rates also impacts long-term international residents and shorter-term remote workers and travelers in Bali. An American ex-pat, Gina Marks, told reports that her landlord more than doubled her rent almost overnight. She explained, ‘I was paying 10 million rupiahs ($641) a month, then one day the owner told me she was raising the price to 40 million rupiahs ($2,565)’.
With many short and long-term international residents in Bali living in accommodation on informal rental agreements, it puts foreigners in a tricky position. Some would argue that local landlords are only acting with business acumen to try and increase profits where possible.
Marks continued, ‘I understand it had to go up, but by increasing it that much, I felt betrayed because I kept food on her [the landlord’s] table during the pandemic’. For most of the lockdown, Marks had been living in a compact two-bedroom villa in the Seminyak area.
The situation is being observed by property developers in Bali, who have shared their insights on the issues. Mark Ching, director of the Tamora Group, which develops large villa and apartment complexes in Bali, explained that property prices in Canggu have increased by 20-30% this year alone.
He explained, ‘There are two reasons behind it. The first is foreigners can travel here freely again, and that has created a lot of confidence for Indonesian investors who saw how quiet things were during the pandemic and how busy the streets are now. There’s a mad rush to be among the first to take advantage of it.
The other big reason is the reasonably recently introduced Omnibus Law. The policy came into effect in late 2020 and effectively allows foreigners to buy both land and apartments and gives them permanent ownership and the right to resell.
Ching explained it was one of the reasons we started our latest project, but because of COVID, there were few foreign buyers. However, lately, the majority of sales have been to foreigners taking advantage of the Omnibus Law’.
The Director of 2M Design Lab, Manuele Mossoni, shared his predictions for the future of the Bali property market for renters and owners. He said, ‘During the next five years, I think prices will increase even faster than now because there are so many people from Europe and America who realize after the bad period of the pandemic, Bali is a pretty good place to stay’.
Plan Your Next Bali Vacation:
Book The Best English Speaking Drivers For Airport Transfers & Tours
Choose From Thousands of Bali Hotels, Resorts, and Hostels with Free Cancellation On Most Properties
For the latest Bali News & Debate Join our Facebook Community
SUBSCRIBE TO NEW POSTS
Enter your email address to subscribe to The Bali Sun’s latest breaking news, straight to your inbox.