Indonesia

 

Indonesia Property Investment Landscape: Navigating Opportunities


There was a downturn in 2020 due to the pandemic. In 2021, the country again revived its indicators.
Indonesian authorities plan to strengthen their economy further and develop Bali as a recreation and entertainment center for all world citizens.
Construction of the most extensive tourist facilities
Large investors began to develop Bali during the pandemic and continue to do so actively. Many establishments have opened: restaurants, beach clubs, and large infrastructure buildings.
for Travelers
Once, many people invested in European property or  buy flats in Indonesia for foreigners, but due to the political and financial problems in the world, everything has changed. At a time when many investment strategies are not working, Bali has evolved into the most secure and trustworthy place to preserve capital. Every day, we receive dozens of requests about how to move to the island and transfer assets here.
Indonesia's economy is growing steadily
Indonesia is recognized as the most influential arising economy in Southeast Asia. It ranks 7th in the world in terms of GDP per capita and 16th in terms of nominal GDP.
Look at the graph below: Before the pandemic, GDP levels grew steadily at an average of 5%he Indonesian government plans to double the tourist flow to the island of Bali by 2025.
During the pandemic, the construction of the largest facilities was announced, which will increase the tourist flow:

  • international airport in northern Bali;
  • ports for cruise ships;
  • a Paramount Pictures theme park in the northwest, slated to open by 2025;
  • Formula 1 tracks;
  • largest university (with the support of America and China).

And in November 2022, the G20 summit will be held in Bali. This largest economic forum will give a new impetus to the island's development.
We expect the island to experience a tourism boom this year. Thousands of people worldwide waited two years for the opening of borders to come and relax here.
Most popular tourist destination
Bali is a paradise for any traveler. In 2021, the island became the top tourist destination.
Due to the diversity of nature and locations: beaches with turquoise water, waterfalls, rice terraces, volcanoes, and tropical jungles, you can travel around the island for months and visit new places every time. It is always warm here (the temperature stays 26–29 degrees), and the tourist season is all year round.
This is why most people fly here for several months. According to AirDNA, 40% of tourists rent accommodation here for 2–3 months. This is a very long time compared to other countries. Bali is a developed island with many top establishments, restaurants, cafes, and beach clubs to suit every taste, for example, with an infinity pool on a cliff above the ocean. Various activities are available: surfing, golf, tennis, volcano trekking, snorkeling, diving, and fishing.
In addition to entertainment, Bali has everything for a fulfilling life: international schools and kindergartens, medical centers, and large sports complexes. The business community is actively developing here: forums and conferences of top speakers are held. And many projects are being implemented to develop and improve the island's quality of life. According to statistics from development companies, a record number of real estate transactions were concluded in Bali from March 2020 to December 2022. According to our company's statistics alone, the number of client requests in February and March 2023 doubled.
Property prices in Bali will rise
There are only a few tourist areas in Bali - this is 5% of the island's total area. Most of Bali is occupied by volcanoes, jungles, and rice fields. And the main tourist areas, which provide investors with high occupancy rates and profitability, are already 95% built up. Large investors purchased the remaining lands for resale at a higher price. This increases the value of land throughout the market, so the price of real estate increases.
For example, the land on which we are building The Umalas Signature apartment complex has increased in price 50 times in 15 years. Looking at this development density, you can buy any property here and get a good income. But that's not true. Even with the high popularity of the area, only some properties here will provide high profitability.
What affects the profitability of real estate
Correctly chosen real estate in Bali can bring high income on average 2–2.5 times higher than in the world. Here are the main factors that affect the profitability of an object:

  • real estate occupancy;
  • rent price;
  • maintenance costs.

Occupancy and rental costs depend on the property format, location, and competition. And maintenance costs are from the management company.
With the right choice of real estate and management company, you can receive an income of 12–15% per year with subsequent increases.
For example, if you buy a villa for $350,000, you can earn an income of $42,000–$52,500 per year after taxes and property management costs.
It is more profitable to invest capital at the construction stage. The income from such investments is usually 30% higher due to the early entry point. And higher potential for real estate value growth. If you buy a villa under construction for $300,000, the finished price will be $390,000–$450,000. It turns out that you earn $90,000–$150,000 during construction alone.
Bali is a growing property market
To outline, Bali is one of the most secure places in the world to keep capital:

  • the lower volatility of the local money;
  • real estate investments yield income in dollars;
  • a budding place where world-scale projects are being built;
  • tourist flow, which offers a high need for rental-quality housing;
  • limited environment for development, which makes the price of things more costly every year;
  • a country that has not been interested in political or economic conflicts.

This is an excellent place to live and relax regarding climate and local ruling.
The main item is that when you choose real estate for investment with help Indonesia-real.Estate, recognize three essential aspects: location, the property structure, and the control system after commissioning.