If You Want To Invest in Indonesia, You Cannot Ignore Bali’s Growth

Called the “island of the Gods”, Bali truly is a paradise, and has now emerged as a popular investment destination.

With scenic beaches and a backdrop of rich cultural heritage, it’s not hard to see why Indonesia’s Bali is one of the top holiday destinations in the world. 

Once a rural farmland, roughly 80% of Bali’s economy today depends on tourism. Films like “Eat Pray Love” gave it international media exposure and further elevated its popularity. 

The knock-on effect is continued growth and rapid expansion of Bali’s economy, which has led to the creation of new jobs and buoyed investment activities. The tourism boom also catalysed Bali’s transformation into one of Indonesia’s wealthiest regions and one of the hottest property investment hotspots in recent years.

Unprecedented price increases, with some properties achieving over 140% growth

The tourism boom has fuelled the real estate industry, driving unprecedented property price increases in the province in recent years. One such example has been observed in Canggu, a resort village located in the Southwest of Bali where luxurious new villas, restaurants and vibrant retail options appear to have cropped up almost overnight. 

According to a report by Global Property Guide, a four-bedroom villa built on freehold land in Canggu’s Berawa Beach – a popular surfing spot – was priced between US$600,000 (S$817,740) and US$700,000 (S$954,030) six years ago. The same villa is now reportedly worth US$1.7 million (S$2.32 million), marking a price increase of roughly 143%. 

The report also noted that villas in Bali are priced from US$1,100 to US$2,300 per square metre (psm*) in 2018, and that there are about 30,000 expatriates who are currently residing in Bali. (Note: 1 square metre = 10.76 square foot).

For investors, there are still opportunities to enter the Bali market while property prices are still relatively affordable. For instance, studio units at Citadines Berawa Beach Bali are available from S$200,000 – that’s less than your upfront down payment requirement if you buy a $1 million condo in Singapore! 

Bali home prices expected to keep rising

This country of over 250 million has seen its gross domestic product quadruple in the last decade and is now one of the hottest markets in Southeast Asia. Its strong economy is expected to continue to fuel property demand in Bali, leading to further price increases. 

This comes particularly amid a thriving tourism sector. According to Statistics Indonesia (BPS), tourism figures stood at 15.8 million for 2018, a 13 percent increase from the previous year. Bali alone saw over 6.07 million tourist arrivals in the same year. It goes without saying that tourism-dependent economies like Bali are well-placed to reap the rewards of this growing sector.

Beyond that, there has also been an increase in foreign interest in properties within Bali, namely from Mainland Chinese investors. Earlier this year, Jakarta and Beijing signed five contracts worth US$23.3 billion as part of China’s Belt and Road Initiative, The Jakarta Post reported. The projects include a US$1.6 billion joint venture to build a power plant in Bali. 

From holiday paradise to property paradise

Bali’s growth story as a property investment destination is expected to continue in the mid-to-long term, especially among foreign buyers looking to invest in beachside properties and luxury villas. 

Suffice to say that in the coming years, the sun-kissed tropical island paradise, commonly referred to as “the island of Gods” will hold appeal not just for holiday fun-seekers, but also for property investors seeking the best lifestyle option with ample space and somewhere magically beautiful. 

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