Real Estate Investment in Bali. 13 Facts for Beginners
March 15, 2023
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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
440 524 €
Villa in Canggu, Indonesia
211 sq.m2
Remote TransactionPayment in RUB
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 30 years with the possibility of extension.
Professional real estate management.
Projected...
Intermark Real Estate
211 084 €
Townhouse in Canggu, Indonesia
79 sq.m1
Remote TransactionPayment in RUB
The complex of 11 townhouses is being built using materials
of the highest quality.
Each townhouse has a private plot of 78-110 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 Real Estate
243 206 €
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 school for expats–GreenSchool.
Apartments on the ground floor of 84 sq.m...
Intermark Real Estate
256 972 €
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 Real Estate
357 926 €
Apartment in Sanur, Indonesia
101 sq.m1
Online ViewingRemote Transaction
A new hotel project for 192 apartments. The complex will be located in one of the most developed tourist areas of the island – Sanure. 1 bedroom - 101 sq.m (from 390.000 USD with 100% payment)2 bedrooms - 204 sq.m (from 780.000 USD with 100% payment) Ocean view from the apartment, starting from the 2nd floor. Balconies with Jacuzzi....
Intermark Real Estate
266 150 €
Loft in Nusa Dua, Indonesia
81 sq.m1
Online ViewingRemote Transaction
A new complex of 12 loft townhouses with 1-2 bedrooms at minimum prices in the location where the G20 summit was held in November this year. Ocean view from each townhouse, premium quality construction and finishes. The price includes full furniture and leasehold for 37 years. A leading European developer with more than 80 completed projects....
Intermark Real Estate
160 608 €
Apartment in Canggu, Indonesia
61 sq.m1
Online ViewingRemote Transaction
A complex of 98 apartments (76 - with 1 bedroom, 22 - with 2 bedrooms) 5 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:
$175,000 for apartments on the 1st floor (6 apartments available)
$185,000 for an apartment on the 2nd floor (4 apartments...
Intermark Real Estate
541 477 €
Villa in Canggu, Indonesia
200 sq.m4
Remote Transaction
A community of 20 villas with 4-6 bedrooms, fully finished and furnished. The villas around the perimeter offer views of rice fields. The price includes a private garden, a 4x11 m swimming pool, as well as a leasehold on land for 34 years - an extension is possible at the market price. Community infrastructure: gym, spa area, coworking, Parking....
Intermark Real Estate
697 496 €
Villa in Canggu, Indonesia
263 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 Real Estate
780 095 €
Villa in Canggu, Indonesia
280 sq.m4
Remote Transaction
Premium 4-bedroom villa with an area of 260 sq. m. The m is built using the highest quality materials. Designer furniture is made to order. The price includes: a plot of 255 sq. m., a private swimming pool (8,6 x 3,2 m), fully furnished, Parking. Leasehold for 25 years with the possibility of extension. Professional property management The villa...
Intermark Real Estate
532 300 €
Villa in Bukit, Indonesia
200 sq.m2
Remote Transaction
The project with 22 villas is located 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, near beach clubs, golf courses and a branch of the famous school for expats–GreenSchool.
Villa with 2 bedrooms of 200 sq.m on a plot of 300 sq.m...
Intermark Real Estate
495 590 €
Villa in Bukit, Indonesia
180 sq.m2
Remote Transaction
A finished villa in a recently commissioned project from the owner - income immediately.Location in the premium area of the Bukit Peninsula, surrounded by developed tourist infrastructure, premium segment hotels, restaurants, bars.
2 minutes to Jimbaran Beach and beach club, 15 minutes to the airport.
The price includes: plot of 115 sq.m,...
Intermark Real Estate
692 908 €
Villa in Bukit, Indonesia
200 sq.m32
Remote Transaction
Finished villa of 200 sq.m in a recently commissioned project from the owner - income immediately.Location in the premium area of the Bukit Peninsula, surrounded by developed tourist infrastructure, premium segment hotels, restaurants, bars. 2 minutes to Jimbaran Beach and beach club, 15 minutes to the airport. The price includes: plot of 200...
Intermark Real Estate
504 767 €
Villa in Canggu, Indonesia
204 sq.m3
Remote Transaction
There are 2 villas for sale, located on plots of 273 and 310 sq. m. The villas are fully furnished, have 3 large bedrooms, a swimming pool and terraces.
The villas are located in a protected area of a residential complex, a 2-minute walk to Pererenan Beach, bars and restaurants.
Leasehold for 30 years with the possibility of extension...
Intermark Real Estate
683 730 €
Villa in Bukit, Indonesia
310 sq.m3
Remote Transaction
A gated complex of 10 3-bedroom villas on the Bukit Peninsula in the southern part of Bali.
3-storey 3-bedroom villa of 310 sq.m on a plot of 330 sq.m with a swimming pool and patio. The last villa in the complex with ocean views. The price includes a private garden, an 8x3 m swimming pool, complete turnkey finishing and furnishing, full...
Intermark Real Estate
697 496 €
Villa in Bukit, Indonesia
288 sq.m2
Remote Transaction
The project with 22 villas is located 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, near beach clubs, golf courses and a branch of the famous school for expats–GreenSchool. 2 bedroom villa of 288 sq.m on a plot of 397-420 sq.m...
Intermark Real Estate
2 019 068 €
Villa in Bukit, Indonesia
835 sq.m5
Remote Transaction
The project with 22 villas is located 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, near beach clubs, golf courses and a branch of the famous school for expats–GreenSchool. Villa with 5 bedrooms of 835 sq.m on a plot of 1436 sq.m...
Intermark Real Estate
293 683 €
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, near beach clubs, golf courses and a branch of the famous school for expats–GreenSchool. Apartment on the third floor of 84 sq.m - ocean...
Intermark Real Estate
312 038 €
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, near beach clubs, golf courses and a branch of the famous school for expats–GreenSchool. The apartment is 84 sq.m. with a side window...
Intermark Real Estate
339 571 €
Apartment in Bukit, Indonesia
103 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, near beach clubs, golf courses and a branch of the famous school for expats–GreenSchool. Apartment on the 2nd floor of 103 sq.m. -...
Intermark Real Estate
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.
