Bali is one of the most popular tourist destinations in the world, attracting millions of visitors every year with its stunning natural beauty, rich culture, and diverse attractions. But Bali is not only a paradise for travelers, it is also a hotspot for real estate investors who are looking for high returns, low risks, and long-term growth potential.
In this article, we will recap the key facts, data, and more about Bali’s real estate market in 2023, and why it is one of the most profitable locations in the world for investors.
How did Bali’s real estate market perform in 2023?
Bali’s real estate market performed exceptionally well in 2023, despite the challenges posed by the COVID-19 pandemic in the previous years. The market recovered quickly from the downturn in 2020 and 2021, thanks to the effective management of the health crisis by the Indonesian government, the gradual reopening of international borders, and the pent-up demand from domestic and foreign buyers.
The property transactions increased by 40% in 2023 compared to 2022, and the property prices increased by 15% on average across the island. The market was driven by strong demand for high-end properties, especially in popular areas such as Seminyak, Canggu, Ubud, and Uluwatu. The rental market also saw a significant increase in occupancy rates and rental yields, as more tourists and expatriates flocked to Bali for leisure or work.
- Property transactions increased by 40% in 2023 compared to 2022
- Property prices increased by 15% on average across the island
- Rental occupancy rates increased by 50% on average across the island
- Rental yields increased by 25% on average across the island
- Yearly revenue from property management partners increased by 300% in 2023 compared to 2022
- Year on year growth from property management partners was 200%
- Number of foreign tourist arrivals to Bali increased by 150% in 2023 compared to 2022, reaching 10 million visitors
- Residential property price index in Denpasar was 102.29 index points as of the first quarter of 2023
- Year on year residential property price index growth in Denpasar was 0.27% as of the second quarter of 2023
What were the main trends and opportunities in Bali’s real estate market in 2023?
Some of the main trends and opportunities that shaped Bali’s real estate market in 2023 were:
Co-living and co-working spaces
As more people embraced remote work and digital nomadism, co-living and co-working spaces became more popular and profitable in Bali. These spaces offered a combination of accommodation, work facilities, social activities, and community support for people who wanted to live and work in Bali. Some of the examples of successful co-living and co-working spaces in Bali were Outpost, Dojo Bali, Roam Bali, and Livit Hub.
Eco-friendly properties
As more people became aware of environmental issues and sustainability, eco-friendly properties became more attractive and valuable in Bali. These properties used renewable energy sources, recycled materials, organic farming methods, water conservation systems, and waste management solutions to minimize their environmental impact. Some of the examples of eco-friendly properties in Bali were Green Village, Bambu Indah, Fivelements Retreats, and Hideout Bali.
Rentals
As more people visited or relocated to Bali for short-term or long-term stays, rentals became more lucrative and competitive in Bali. Rentals offered a flexible and affordable option for travelers or expatriates who wanted to enjoy the island’s lifestyle without committing to buying a property. Rentals also offered a steady income stream for property owners who wanted to capitalize on their assets. Some of the platforms that facilitated rentals in Bali were Airbnb, Bukit Vista, Travelio, and Flipkey.
What were the main challenges and risks in Bali’s real estate market in 2023?
Some of the main challenges and risks that faced Bali’s real estate market in 2023 were:
Legal regulations
As a foreigner, buying or owning a property in Bali was subject to certain legal regulations that could be complex and confusing. For instance, foreigners could not own freehold land titles (hak milik) in Indonesia, but they could own leasehold titles (hak pakai) or right-to-use titles (hak sewa) for up to 80 years. Foreigners also had to pay various taxes and fees when buying or selling a property in Bali. Therefore, it was advisable for foreigners to consult with a reputable lawyer or agent before investing in Bali’s real estate market.
Natural disasters
As an island located on the Ring of Fire, Bali was prone to natural disasters such as earthquakes, volcanic eruptions, tsunamis, landslides, floods, and droughts. These disasters could cause damage to properties or infrastructure, disrupt tourism or business activities, or affect the quality of life on the island. Therefore, it was important for property owners or investors to have adequate insurance coverage and contingency plans for their properties in case of natural disasters.
Market fluctuations
As a market that depended largely on tourism and foreign investment, Bali’s real estate market was susceptible to fluctuations due to external factors such as global economic conditions, political stability, health crises, travel restrictions, or consumer preferences. These factors could affect the demand and supply of properties on the island, as well as their prices and returns. Therefore, it was essential for property owners or investors to monitor the market trends and conditions, and to diversify their portfolio or strategy to mitigate the risks of market fluctuations.
Fake Real Estate Agent
Unscrupulous individuals operating as fake real estate agents have been observed in Bali, taking advantage of their tourist visa status. These individuals engage in illicit activities such as renting or selling villas without adhering to the necessary regulations. This not only raises concerns for unsuspecting property buyers or renters but also poses a significant legal risk for the fake agents involved.
These deceptive practices not only undermine the integrity of the real estate market in Bali but also jeopardize the interests of both property seekers and the local authorities. Such individuals, who exploit their tourist visa privileges for financial gain in the real estate sector, may face legal consequences from Bali regulators.
Conclusion
Bali’s real estate market in 2023 was a remarkable success story, as it bounced back from the pandemic and achieved impressive growth and performance. The market offered a range of opportunities for property owners and investors who wanted to benefit from the island’s popularity, affordability, and potential. However, the market also posed some challenges and risks that required careful planning, research, and guidance. Therefore, it was advisable for property owners and investors to work with a professional and reliable real estate agency or consultant who could help them navigate the market and achieve their goals.
