Real Estate Investment in Bali. 13 Facts for Beginners
March 15, 2023
19
Ekaterina Orlova, Director of the International Investment Department of Intermark Real Estate, talks about the second most popular destination after Dubai according to Tripadvisor.
Fact #1
The Indonesian economy is one of the fastest growing in the world. The annual GDP growth has been 5% for 50 years. Inflation is lower than in Europe and the USA - about 5% in 2022.
The population is actively growing and exceeds 270 million people (4th place in the world), and the middle class is rapidly increasing. According to forecasts, in 2024, Indonesian residents will make 1.4 billion trips, a significant part of which will be on trips from Jakarta to resorts. In particular, Bali.
Finally, Indonesia is one of the most politically neutral countries in the world, which was proved at the G20 summit held there.
Fact #2
Bali is a relatively young market that provides fantastic opportunities for investors. On the one hand, it is fully formed and has already developed locations with ready-made investment products. On the other hand, this market is not too regulated yet and allows you to get a relatively high income. Which is increasing at the moment due to the restoration of international tourism, the increase in occupancy of facilities, and rental rates.
The Bali market has its own nuances that an investor should take into account. For example, your bear the risk of investing in a project at the early stages of construction. On the other hand, during the construction period, you can earn unrealistic amounts – 30-60%, and in some cases 100%.
Fact #3
The real estate market has been affected by the pandemic. No income – no sales – no liquidity, and as a result, prices fall. However, Bali went through stagnation. Many digital nomads came to the island and stayed for more than three months. Therefore, for example, the owners of villas received 5-6% per annum.
Fact #4
It would not be correct to correspond to Indonesia and the tourism sector. In Jakarta and other major cities, the majority of residents are not tourists. But Bali, Lombok, and Gili are tourist centers.
The flow of foreigners is now recovering, and the occupancy rate at the facilities is approaching 80-90%. Although there are three times fewer people coming to the country than before the pandemic. The forecast for a further traffic increase is optimistic. In Bali, it is planned to build a second airport, a new port for cruise liners, Paramount Pictures Park, and Formula 1 tracks. The authorities are doing a lot to attract tourists.
Fact #5
The tourist infrastructure in Bali is concentrated in the south. Historically, the island developed from the airport. The new neighborhoods in Kuta and Seminyak are fully occupied already.
After that the developers turned their attention to Canggu and Berava – the most popular areas with dense buildings and narrow streets ... Only a few new projects are being built near the coastline, it is almost all settled. For example, the Canggu district is 97% built up, and there are no vacant lots near the ocean. Therefore, in the best case – the second line, but more and more often new construction is carried out in the depths of the island.
Most of the developers are moving their projects further west from Canggu to the area of Pererenan Beach and (and there are more such developers) to the Bukit Peninsula, with popular Instagram locations. It is possible to build there in specially designated tourist areas, which creates a construction limitation and increases demand...Bukit has many five-star hotels in Bali, and the Nusa Dua area held the G20 summit.
I want also to mention Ubud: it is less interesting for investment and is more popular for its own residence among expats, yoga lovers, and spiritual practitioners.
Examples of real estate in Bali
524 909 €
Villa in Canggu, Indonesia
284 sq.m2
Remote Transaction
The villa complex is located in Changgu district.
The villas are fully furnished and decorated in a modern style. Each villa has a spacious living room, large bedrooms, a large pool in the garden and an additional pool on the roof.
Leasehold for 25 years + 5 years guaranteed extension
Professional property management
VAT is included...
Intermark Global
211 806 €
Townhouse in Canggu, Indonesia
79 sq.m1
Remote Transaction
The complex of 11 townhouses is being built using materials
of the highest quality.
Each townhouse has a private plot of 79-92 sq. m and
swimming pool. The price includes a full set of designer furniture,
custom made.
There is a Parking lot on the territory of the complex, from the windows of townhouses
there are views of rice...
Intermark Global
511 096 €
Villa in Canggu, Indonesia
280 sq.m3
Remote Transaction
The residential complex includes fully furnished villas in a modern style. The price of each villa includes a private garden and a swimming pool.
3 lots out of 7 are available:
- 3-bedroom villa of 280 sq.m on a plot of 237 sq.m - $555,000 (delivery in August 2024)
- villa with 3 bedrooms with an area of 280 sq.m on a plot of 231 sq.m -...
Intermark Global
313 104 €
Apartment in Bukit, Indonesia
84 sq.m1
Online ViewingRemote Transaction
The apartments are located in a premium project on the Bukit Peninsula, where the main tourist infrastructure and the best hotels of the island are concentrated. A 5-minute drive to the beautiful Melasti beach, close to beach clubs, golf courses and a branch of the famous expat school - Green School.
Apartments on the ground floor of 84 sq.m....
Intermark Global
257 850 €
Loft in Canggu, Indonesia
84 sq.m1
Online ViewingRemote Transaction
The built apartments from the investor Intermark Real Estate are located in a coastal complex occupying a plot of 1.5 hectares on the most popular coast of Indonesia.
The 84 sq.m apartment is one of the best units in the project, due to its angular location on the penultimate floor (only infrastructure facilities are located above).
The...
Intermark Global
221 015 €
Apartment in Canggu, Indonesia
61 sq.m1
Online ViewingRemote Transaction
A complex of 98 apartments (76 - with 1 bedroom, 22 - with 2 bedrooms) 7-10 minutes by car from the ocean.
In the announcement, the layout of a 1-bedroom apartment with an area of 61 sq.m
Prices with 100% payment:
$240,000 for apartments on the 1st floor (6 apartments available)
$250,000 for an apartment on the 2nd floor (4 apartments...
Intermark Global
755 133 €
Villa in Canggu, Indonesia
265 sq.m4
Remote Transaction
The premium villa is built using the highest quality materials and is furnished with custom-made designer furniture.
The price includes: fully furnished, private plot of 259 sq.m., swimming pool 8,6x3,2 and Parking.
Leasehold for 30 years with the possibility of extension.
Professional real estate management.
VAT is included in the...
Intermark Global
1 519 475 €
Villa in Canggu, Indonesia
465 sq.m56
Online ViewingRemote Transaction
The modern villa is located on a plot of 460 sq.m., includes 5 bedrooms, 6 bathrooms, a swimming pool and a roof terrace with ocean and river views.
The price of the villa includes finishing and full furniture.
Leasehold for 30 years with the possibility of extension
VAT is included in the price
Professional property management...
Intermark Global
331 522 €
Villa in Uluwatu, Indonesia
85 sq.m1
Remote Transaction
The latest villas in a premium residential complex of 19 villas.
Location: The increasingly popular Uluwatu district on the Bukit Peninsula, where the main tourist infrastructure of the island is concentrated: the airport, the first high-speed toll road, shopping malls, premium segment hotels.
– 15 minutes to Melasti and Dreamland beaches...
Intermark Global
709 088 €
Villa in Bukit, Indonesia
310 sq.m3
Online ViewingRemote Transaction
Gated complex of 10 3-bedroom villas on Bukit Peninsula in the southern part of Bali.
A 310 sqm 3-storey 3-bedroom villa on a 330 sqm plot with pool and patio. The last villa in the complex with ocean views.
Included in the price is a private garden, 8x3m swimming pool, full turnkey decoration and furnishing, full property management and a...
Intermark Global
1 059 028 €
Villa in Bukit, Indonesia
361 sq.m4
Remote Transaction
A project with 22 villas on the Bukit Peninsula, where the main tourist infrastructure and the best hotels of the island are concentrated. A 5-minute drive to the beautiful Melasti beach, close to beach clubs, golf courses and a branch of the famous expat school-Green School.
A 4-bedroom villa of 361 sq.m on a plot of 452 sq.m with a swimming...
Intermark Global
2 302 234 €
Villa in Bukit, Indonesia
835 sq.m5
Remote Transaction
A project with 22 villas on the Bukit peninsula, where the main tourist infrastructure and the best hotels of the island are concentrated. A 5-minute drive to the beautiful Melasti beach, close to beach clubs, golf courses and a branch of the famous expat school–Green School.
Villa with 5 bedrooms of 835 sq.m on a plot of 1017 sq.m with a...
Intermark Global
313 104 €
Apartment in Bukit, Indonesia
84 sq.m1
Online ViewingRemote Transaction
Apartments in a premium project on the Bukit Peninsula, where the main tourist infrastructure and the best hotels of the island are concentrated. A 5-minute drive to the beautiful Melasti beach, close to beach clubs, golf courses and a branch of the famous expat school-Green School.
The apartment on the third floor is 84 sq.m. - ocean view...
Intermark Global
331 522 €
Apartment in Bukit, Indonesia
84 sq.m1
Online ViewingRemote Transaction
Apartments in a premium project on the Bukit Peninsula, where the main tourist infrastructure and the best hotels of the island are concentrated. A 5-minute drive to the beautiful Melasti beach, close to beach clubs, golf courses and a branch of the famous expat school-Green School.
The apartment is 84 sq.m. with a side window and panoramic...
Intermark Global
644 626 €
Villa in Canggu, Indonesia
235 sq.m2
Online ViewingRemote Transaction
Two ready-made villas in the developer's flagship project are located in the developing area of Pererenan, surrounded by all the infrastructure of the popular areas of Changu and Berava.
- 2 BEDROOM VILLA of 235 sq.m - $700.000
- 4-BEDROOM VILLA of 310 sq.m - $890.000
Fully furnished villas have modern interior design, large bedrooms,...
Intermark Global
460 447 €
Villa in Bukit, Indonesia
186 sq.m3
Remote Transaction
A complex with 10 spacious villas on a rocky cliff in the increasingly popular area of the Bukit Uluwatu Peninsula. Close to beaches, golf course, Savaya Beach Club and surf spots.
Price:
$500,000 for 3-bedroom villas of 186 sq.m
$550.000 for 4-bedroom villas of 211 sq.m
$600,000 for 5-bedroom villas of 275 sq.m
The price includes:...
Intermark Global
174 970 €
Apartment in Uluwatu, Indonesia
35 sq.m
Online ViewingRemote Transaction
A complex of 19 apartments and townhouses on a picturesque cliff in Uluwatu with ocean views from every unit. Price includes: ocean view, furnishings and appliances, 2 types of design to choose from. Infrastructure of the complex: infinity pool, gym, restaurant, co-working centre. Professional management on the basis of MC developer. The minimum...
A new complex of designer view villas in Ubud. The occupancy rate of ready-made villas of this developer in Ubud reaches 90%. Number of units in the project: 15 villas
The price includes: high quality construction and finishing, premium plumbing, furniture, infinity pool, private well, house Parking
Leasehold: 25 years with the right to...
A complex of newly commissioned 3-storey townhouses in the center of the most popular area of Bali, 3 minutes by bike to Berava beach. The species characteristics will remain, the neighboring land belongs to the state and will not be built up. Number of units in the project: 8 townhousesThe price includes: finishing and furnishing, a plot of 100...
Two 1-bedroom apartments from $ 200,000 to $ 225,000 from the owner in the project with delivery in six months. Units from the developer are no longer on sale. The price is reduced due to urgency. The market price of similar apartments is $235,000The main tourist location, a popular area between Seminyak and Changu with dense buildings and...
Intermark Global
Fact #6
The quality of construction in Bali is a big concern. Demand is high, and many developers enter the market to make money fast. Therefore, we always pay attention to the track record and quality of developers, and we visit all the properties ourselves.
In Bali, there are already completed projects where the quality is so poor that the villa requires to repair a few weeks after the start of operation. Due to quality problems in Bali, there are delays in the commissioning of projects: it is not always clear how many times workers will redo everything. It is fundamentally important to have a representative who monitors the construction site.
The other side of this problem is that the island does not have unfinished buildings. It is easier and cheaper for a developer to build something and hand it over than not building it at all. Therefore, it is necessary to be extremely careful when choosing a project for investment...
Fact #7
There are two ways to make money in Bali.
You can invest in ready–made projects, although they are hard to find. Almost everything is sold at the off-plan stage - usually, reselling or secondary properties. Such facilities are managed by their own operators of development companies – when choosing a high-quality project, you can receive 9-15% per annum from short-term rental. The figures seem high, but we are ready to present our calculations to any interested investor…
The second method is speculative – to invest in presale and resell by assignment before putting the facility into operation. During the construction period, an object can gain up to 60% in price.
Fact #8
Foreigners are prohibited from owning land in Indonesia; they can rent it from an Indonesian citizen. This is a purchase in a leasehold, with the right of a long-term lease, as, for example, in Thailand.
But unlike Thailand, the lease term in the country is not unified and depends on the developer's agreements with the owner. The initial period included in the price is 25-45 years. There is a priority extension period, which is also included in the contract. It is possible to extend the contract at the end of the first term by paying a certain market price. Now it is $1,000 per year of the extension.
The priority extension period also varies from zero to 50 years. When both the initial and priority period ends, the owner can agree on further prolongation. It is no longer guaranteed by the contract, so the owner of the land can refuse to renew.
Fact #9
The second form of ownership is the right to build an HGB – an analog of a freehold. A foreigner can open a company in Bali, be the sole owner, and issue an HGB right to this company. But such a scheme is only available when buying a villa or detached house.
Important! When you sell an object with an HGB right to an Indonesian, it is converted into a full-fledged freehold.
The right of HGB is extended according to the scheme of 30-20-30 years, and it is not limited to 80 years.
If we talk about apartments, then their ownership of them will always be a leasehold, even for the Indonesians themselves.
Fact #10
Mortgages are not issued to foreigners in Indonesia. Developers offer installments. Moreover, most developers will not accept 100% payment for the object and will not give a discount. The initial payment is 30%, and then – the payment is according to an individual schedule agreed upon with the developer: quarterly or monthly until the end of construction.
Fact #11
There are three ways to pay for real estate in Indonesia:
swift transfer from banks that are not under sanctions
through cryptocurrency – developers accept crypts on their crypto wallets,
payment in rubles is actually through a transfer in cryptocurrency, but we will help those who do not understand it.
Fact #12
The most affordable offer in Bali in our portfolio is $165 thousand. Additional expenses – 12% (11% – VAT, 1% – notary services).
There is also a personal income tax in Indonesia. Officially, the rate is 20% of net income. But almost all developers' management companies can optimize the rate to an effective 10%. In any case, the investor does not need to worry about paying this tax, because the management company acts as the tax agent of the investor and transfers the already "cleared" income to him.
Fact #13
Most management companies do not restrict owners in any way in the right to stay in their apartments or villas. The exception is a couple of large developers who have this period of 30 days a year…
However, when making a deal, you can choose another investment program and agree on special conditions.
Please contact Ekaterina Orlova, Director of an International Investment Department at Intermark Real Estate, for advice on foreign real estate investment.
