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Renters In Bali Experiencing Shock As House Prices Soar

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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. 

Luxury Traditional Villa Home In Bali With Swimming Pool.

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.

Luxury Kuta Beachfront Villa In Bali At Sunset.

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. 

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Small Townhouse In Denpasar Bali

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. 

Traditional Bali Buildings With Terracotta Roofs

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. 

Landscape-of-Ubud-Village-With-Guesthouse-And-Rice-Field

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. 

Bali-Villa-And-Garden-At-Night

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. 

Entance-To-Bali-Ubud-Guesthouse-With-Tropical-Garden

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’. 

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Bali Regular

Sunday 30th of October 2022

i too agree with the statement of greedy owners... villa I usually pay 1000$ before covid, now its 4350$... got told, by all the agents i spoke with, owners are crazy greedy trying to recover their loses from covid period... but its gathering dust, or they go to unexperienced first time tourists. Theres a reason why everyone I know as regulars to bali, end up thailand or vietnam instead...

Francy

Friday 28th of October 2022

Expats will find out soon the nightmare of living in Bali, quick to go away...

wickedwilly36

Saturday 29th of October 2022

@Francy, Having lived here for over a decade I disagree. Bali is not perfect, but where is? Give me Bali anyday compared with living in the West Where I would still have to work and not have anywhere near the standard of living I have here.

Randy

Saturday 29th of October 2022

@Francy, vetted professional expats with certain class live in Jakarta and are law abiding citizens.

Buaya

Friday 28th of October 2022

I live in a 2 bedroom apartment for $1500 per month in Southern California, 1/2 mile to the beach, 72 degree weather with no humidity. And I'm broke. Why do I need to go to Bali?

*hint* I don't.

Randy

Saturday 29th of October 2022

@Buaya, Do you have rent control? Does it exist in SoCal...if you do keep it.

Yuoku

Saturday 29th of October 2022

@Buaya, in Bali right now they want same amount of money (20M IDR) for 1 bedroom crappy shack that doesn't block any noise from the loud bikes or nightclubs. Forget about infrastructure outside of the house, that's not included in Bali.

Wayan Bo

Thursday 27th of October 2022

In civilized countries are such price jumps impossible, illegale and prohibited by law. - It’s only possible in wilderness such our, where some persons are only a few steps from cannibalism away in their mind.

Randy

Friday 28th of October 2022

@Wayan Bo, civilized countries do adopt the price gouging. However it isn't a technical economic term with a precise definition. It's all about exorbitant price increases of essential goods that follow as a result of a crisis.

However there's a thin line between what price increase is acceptable and what is not. As long as the justification of a price increase is accurate and can be substantiated to avoid any misleading conduct risk.

Exp

Thursday 27th of October 2022

The renters will probably face similar shock now post covid as landlords did when covid arrived.

Villas in the tourist zone can be rented out daily so those on a monthly and annual contract in the tourist zone during covid must expect things to change back to pre covid prices.

As with all type of rent agreement; ensure that price increase must be given well in advance so there is time to find alternative accommodation. I asked for 2 months notice in my contract.