What is the outlook for the development of Indonesia's economy and the real estate market in Bali?

Economic development of Indonesia

The economic situation in Indonesia is showing active development and holds one of the leading positions in Southeast Asia, standing out as one of the most promising economies in the world. Each year, the country experiences a GDP growth of around 5%. In 2022, economic growth reached 5.31%, marking a record high since 2013. Throughout 2023, the positive trend continued: in the first quarter, GDP growth was recorded at 5.03%.

Stability of the national currency

The national currency, the Indonesian rupiah, has demonstrated its stability. Currency fluctuations against the US dollar have not exceeded 13% since 2016. Inflation rates in the country range from 3% to 5.5%, and in 2022 it was around 5%, which is significantly lower than the figures observed in the United States and European countries.

Political stability

The political situation in Indonesia remains stable. The country maintains a neutral position on a number of international events. Indonesia is the fourth most populous country in the world, and as of 2023, its population has exceeded 278 million people.

Tourism in Bali

Every month, the popular tourist island welcomes around 500,000 vacationers, many of whom are travelers from China, India, Japan, the UK, and Australia. According to a TripAdvisor study, Bali became the second most popular destination in the world in 2023.

Infrastructure development in Bali

The infrastructure in Bali is actively being improved and modernized: huge investments are being directed towards upgrading facilities with an eye on the future. The main projects being implemented on the island include:

• Completion of the Sanur port reconstruction.
• The opening of a new passenger terminal for speedboats operating routes to Nusa Penida and Nusa Lembongan.
• The opening of the Bali International Hospital, intended for medical tourism, is scheduled for early 2024.
• The construction of the new Gili Manuk - Mengwi expressway will begin in 2024.
• The opening of a new theme park from Paramount in 2025.

The situation in the real estate market

In the real estate sector, the market has begun to recover its positions after the COVID-19 pandemic. From 2009 to 2019, the real estate market in Bali grew rapidly due to an increase in tourist flow and rising foreign investments. Housing prices steadily rose, especially in popular areas such as Seminyak, Canggu, and Ubud.

However, the COVID-19 pandemic created serious obstacles to the recovery of this sector. The hospitality industry suffered significant losses, which affected the decline in real estate prices. Many developers and investors temporarily suspended the implementation of new projects, and some were even forced to freeze already initiated developments and initiatives.

The future of Indonesia

Thus, both the economic and social situations in Indonesia are undergoing changes, reflecting local and global trends. Views on the future are optimistic, and there is hope that the country will be able to return to sustainable growth and development rates.

Recovery of the real estate market in Bali

In 2021, as restrictions on movement were gradually lifted, the Bali housing market began to show signs of activity again. The return of investors from Asia was particularly noticeable, as they quickly returned to the island, heralding a new phase of development. By 2022, the real estate sector had fully recovered from the effects of the pandemic and demonstrated rapid growth.

Rise in real estate prices

The rise in prices in the Bali market is outpacing the overall figures for Indonesia. According to a study conducted by the Indonesian Bank in the second quarter of 2023, the housing price index increased by1.92%Compared to the previous year, positive changes have been observed across the country for several years. On a popular island known among investors, the pace of price increases has noticeably accelerated, especially for new projects.

Market analysis from experts

Evgeny Zhuykov, an analyst specializing in the real estate market in Bali, emphasized that housing prices have significantly increased and have reached levels similar to those before COVID-19. He noted a sharp rise in prices for properties under construction, as well as for land plots in certain areas. As of today, the cost of real estate at the construction stage has nearly equaled the prices of completed properties, with the average decrease being around14%.

Demand for housing

Interest in real estate is being shown by both foreign investors and local residents. According to realtors, the demand for local properties continues to grow. However, it is important to consider certain seasonality:

• The highest number of transactions is recorded during the peak tourist season when there is an influx of tourists to the island.

Anastasia Gorgieva, the manager of international sales at Mirah Investment & Development, noted that both local and foreign buyers have diverse goals for their real estate investments — ranging from acquiring a second home to generating rental income. While local buyers often prefer to purchase properties in freehold format, most transactions by foreigners are conducted on leasehold terms, reaching95%.

Legislation of Indonesia

According to Indonesian laws, foreigners are not allowed to own land in full ownership — this right is limited only to citizens of the country or local companies. However, there are various options for property arrangements:

• how to use(right to use)
• how to use(right to build)
• hak sewa (rental or leasing agreement).

For more detailed information about the real estate purchasing process, we recommend consulting the relevant sources.

Activation of the construction sector in Bali

After the crisis related to COVID-19, the construction sector in Bali has become active again. Anastasia Gorgieva reported that in the last 12 months, about240new construction companies, more85%of which were founded by foreigners. The completion of construction is expected to take place from 2023 to 2025, approximately500,000 square metersliving spaces, which corresponds approximately4800 objectsMore42%All new projects are expected by 2025.27%— in 2024 and31%— in 2023. Considering these trends, the real estate market in Bali is once again in the spotlight, opening new horizons for investors and future owners.

The growth of construction in Bali

Evgeny Zhuykov, a real estate market research expert at Balines Property, points out a significant increase in the construction of new residential complexes on the island of Bali. The peak of completion and commissioning of these projects is expected to occur in the second half of 2024 and the beginning of 2025. Despite the active development of new properties, the market is facing a shortage of popular types of housing, creating a sense of scarcity.

Shortage of apartments and villas

Anastasia Gorgieva, the Director of International Sales at Mirah Investment & Development, emphasizes the clear shortage in the apartment segment. Additionally, there is a lack of villas suitable for comfortable living, especially those with two or more bedrooms. This segment is facing a significant mismatch between demand and what is available on the market – the number of offers is half of the needs.

Seasonal fluctuations in the real estate market

Evgeny also reports that in attractive tourist areas like Canggu and Bukit, there are seasonal fluctuations in housing supply. However, considering the planned construction of new villas, it is expected that by 2025, the number of one or two-bedroom properties in Canggu will increase by 40-60%. This could lead to a decrease in prices and occupancy rates.

In Bukit, where the occupancy rate of properties has already reached 90%, the number of villas with a similar number of bedrooms will increase by 10-30%, but this growth will only affect certain segments.

Changes in customer preferences

Changes in consumer preferences are becoming increasingly evident, as noted by the specialist. Previously, foreign investors primarily focused on resort properties for short-term rentals, but now they are seeking larger and more comfortable apartments that can meet the needs for both long-term rentals and personal living, especially among those planning to spend long months on the island or considering relocation.

Growing interest in luxury housing

Anastasia emphasizes that interest in more expensive housing options has also been increasing. This year, the average transaction price has risen by about 15%. One of the most popular requests remains investment properties priced up to 300,000 US dollars. At the same time, there is a strong interest in villas that have three bedrooms and are located within 500 meters of the ocean.

Deals in 2023

As for the deals made in 2023, their average price showed a decline. In response, developers began to adapt to the changed market conditions by increasing the supply of apartments. In new residential complexes, the average size of the apartments has decreased, but the quality of the finishes has significantly improved.

Customer expectations have also changed, and now developers are focusing on more modern and high-quality interiors compared to the properties that were built earlier.

Real estate in Bali

There are many options for real estate available for purchase on the island of Bali. Among them, there are some truly interesting offers. For example, in Canggu, you can find an apartment with an area of 81 m², priced at €262,073. It includes one bedroom and a bathroom. An online showing is also possible, and the transaction can be completed remotely. Payment can be made in rubles or cryptocurrency. This property is great for rental, and there is currently a promotion where the price is reduced by $65,000 from the price list! If you have any questions, my name is Leon, and I am ready to provide all the necessary information about the availability of properties and their prices. We can offer you more than 30 different projects in Bali!

Interesting Projects

For example, consider one-bedroom apartment options in a luxury complex that features the longest indoor pool in the world. This complex is located in a developing tourist center in Bali and can be purchased with a 24-month installment plan. We also have interesting options available, such as apartments in Canggu for €172,877, with an area of 53 m². They are also available for online viewing and remote purchase, with payment possible in rubles or cryptocurrency.

Five-star hotels

You can also check out the magnificent five-star hotel located right by the ocean, offering stunning views of the Indian Ocean. This unforgettable place is just 15 minutes from the center of Canggu and 45 minutes from Bali's international airport, while being only two minutes from the beach. Additionally, it provides...10% discountupon full payment. The main focus is on ecology, which has become very relevant among investors.

Apartments in Ubud

In Ubud, there are attractive apartments priced at €214,073 for 98 m². These apartments feature one bedroom and two balconies, one of which is equipped with a jacuzzi. The magnificent view of the jungle and proximity to the art trail make this offer particularly appealing. The property is available for online viewing, and there is an option for a 24-month installment plan. Investing in such real estate can yield excellent returns.

Villas and Unique Offers

A villa is offered in Ungasan for €119,542, with an area of 60 m². This cozy wooden building with a pool could be your perfect getaway. Owners can make a down payment of 30%, with the remaining amount payable in installments. Each buyer will receive a fully furnished villa surrounded by greenery, and the construction is being carried out by a reliable developer with a warranty provided.

Apartments in Chemagi

It is also important to pay attention to the apartments in Chemagi, which are priced at €280,465 with an area of 83 m². These unique apartments are located on the first oceanfront line.

Main real estate listings in Bali

If you are on the amazing island of Bali, we would be happy to meet with you to discuss all aspects of purchasing property. You can also visit our office located in Canggu, where we will treat you to a cup of aromatic coffee. In our agency, we offer you a wide selection of real estate that will allow you to enjoy life on this paradise island without unnecessary risks. If it is more convenient for you, communication can be organized in an online format.

Our unique offers

Our portfolio includes a variety of interesting options. For example, you might consider purchasing an apartment with an area of 42 m² for just110,000 €in Canggu, Indonesia. This is a great offer for both living and investment. A remote transaction is possible with payment in rubles or cryptocurrency. The comfortable apartments are located incomplex XO, which is located on one of the most popular tourist streets —Batu BolongThis unique project offers both villas and four-story apartments. The complex includes an indoor bar and an outdoor cinema area for residents. The expected ROI reaches17%and we are happy to share all the details with you.

Villa in Canggu

Among our exclusive offers, we can highlight a villa with an area of96 m²in Canggu, the cost of which is229,889 €This villa can also be shown online and the transaction can be conducted remotely. It is perfect for comfortable living and is located in the same XO complex as the previous apartments, providing access to all amenities. There are various dining and leisure establishments in the area for enjoyable recreation.

Villa in Ubud

Don't miss the opportunity to consider a villa in Ubud, with an area of158 m², at a cost of252,878 €This is the perfect place for family living, located just ain 15 minutesfrom the cultural center of Bali — Ubud. This area is famous for its stunning nature and tranquil atmosphere, making it particularly appealing to tourists. The villa is surrounded by greenery and has a play area for children, which is perfect for family vacations.

Villas in Bukit

Another interesting option is a cozy two-bedroom villa in Bukit, with an area of102 m²The price of this villa is —€174,716It is located in the gay neighborhood.Melasti Dream, a total ofin 2 minutesfrom one of the most picturesque beaches on the island. This beautiful spot is surrounded by modern restaurants and entertainment venues designed for those who want to enjoy beach life. Ngurah Rai International Airport is just a short distance away.25 minutesfrom the complex. The expected ROI for this villa is17%.

Additionally, we have another villa in Bukit, which has an area of102 m²and cost156,325 €This modern complexU Villas IIlocated near the famous districtNusa Duasurrounded by luxurious hotels and magnificent beaches of Bali. The villa has its own yard with a pool, surrounded by greenery, creating an atmosphere of privacy and tranquility. This is a great offer for those looking for the perfect place to live in Bali.

Real estate in Bali

Real estate in Bali is becoming increasingly attractive to investors due to its unique offerings and picturesque landscapes.

Ubud

In Ubud, located in the heart of Indonesia, a luxurious villa is up for sale with a price tag of156,325 €This cozy establishment occupies an area of100 square metersand includestwo bedroomsandone bathroomThis property offers ideal conditions for both a comfortable vacation and long-term rental, as the villa provides a stunning view of the rice fields and features its own swimming pool.

The residence is located in a gated community, and the down payment is only25%In addition, an interest-free installment plan is offered for a period of time.15 monthsthat significantly simplifies the purchasing process for potential owners. It is important to note that this villa is currently in the presale stage, and a steady increase in prices is expected, with a projected capital appreciation of an impressive34%by the completion of construction.

Uluwatu

There is also a wonderful opportunity to purchase a villa in Uluwatu for a price of156,325 €with an area170 m²This is modern housing withthree bedroomsandwith two bathroomsLocated just a couple of minutes from Melasti Beach. Purchases can be made in both rubles and cryptocurrency, making the process as convenient and flexible as possible for buyers.

The expected completion date for the construction is set forMay 2025The preview of the villa is available fromApril 2024.

Changu

If you are looking for more spacious options, a villa is for sale in Canggu priced at560,929 €with an area of201 m²This is a three-bedroom villa with a terrace roof, offering a private pool, a spacious living room, and a kitchen area.

The first floor is designed with all modern conveniences in mind, while the second floor features the bedrooms, creating an atmosphere of pleasant coziness and comfort.

Other options in Canggu

In Canggu, you can also consider a compact one-bedroom villa with a terrace at a price.252,878 €Its area is123 m²and it offers a cozy indoor garden, while the living room has everything needed for comfortable living. The villa includes:

• Shower
• The kitchen
• Dining area

For those who prefer more compact apartments, one-bedroom apartments are offered at a price of186,670 €total area55 square metersThis accommodation features a cozy bedroom and an open kitchen. There are also studios in the same area, for example, there is an offer for179,313 €area47.31 m²These apartments are perfect for small groups, as they include a bedroom and a lounge area with access to a private pool.

Conclusion

While being on the amazing island of Bali, investors have a great opportunity to explore these real estate options in person. And if an in-person meeting is not possible, an online viewing can be arranged. Various payment schemes make purchasing property in Bali even more accessible and appealing.

Property Description

This residential property features a cozy bedroom, enhanced by a spacious terrace located on the third floor. Take note of the expansive bathroom with a modern shower and bathtub, as well as a separate guest toilet.

The interior space includes plenty of storage, and the living room is equipped with a plasma TV for comfortable relaxation. This pleasant home environment also features a kitchen, perfect for preparing a variety of dishes.

Proposal from Alex Villas

The Alex Villas agency offers a unique villa in Kuta, priced at321,845 eurosThe area of the object is161 m²It includes two bedrooms and two bathrooms. Clients can take advantage of the online viewing service.

This villa is built by a reliable developer and is available for rent.24 years oldwith the possibility of extending for25 yearsThere is5-year warrantyon the building structure and2 yearsFor finishing. The conditions here are perfect for both comfortable living and renting out, thanks to the high-quality designer finishes.

Completion of construction

According to the plan, the construction will be completed during the period fromfrom August to October 2024For more information, please contact us.

Proposal from DDA Real Estate

The DDA Real Estateagency offers apartments in Canggu at a price131,497 eurosThe area of the apartment is42 m²It includes one bedroom and a bathroom. Clients can complete the transaction remotely with payment in rubles.

This apartment is located in one of the best areas, providing comfortable living and contributing to generating passive income from10%to20%per year. The apartments are offered with complete "turnkey" finishing, and for just10 minutesYou can walk to the ocean.

Complex and opportunities for investors

The complex consists of4 floorsand is divided by20 sectionsWith the status of an apart-hotel and located in an attractive area, this project offers investors the opportunity for a steady income.

Tourist infrastructure in Bali

The popular investment spots in Bali remain the same. The main tourist attractions are concentrated in the southern part of the island. Bali has historically developed around the airport:

• Popular areas like Kuta and Seminyak were the first to start developing near Ngurah Rai International Airport in Denpasar.
• The Bukit Peninsula has also become attractive to travelers.

Developing areas

In recent years, developers have started to pay attention to the developing area of Canggu, which is located just a10 kilometersto the north of Kuta. As a result97% of the territoryIt is already built up, and the plots on the first line from the ocean are no longer available. New projects are also emerging in the prestigious area of Nusa Dua, where the recent G20 international summit took place.

New trends in development

Objectively speaking, developers are increasingly choosing new areas for their projects within the island, offering housing for comfortable living away from the hustle and bustle of the city. Ubud, located in the central mountainous region of Bali, was once a center for folk crafts and is now actively developing the wellness industry.

New yoga centers and meditation studios are opening in this area, as well as cafes offering vegetarian and healthy dishes.

Popular neighborhoods among buyers

It is worth noting that among real estate buyers, three areas currently stand out as the most popular:

• Changu,
• several plots in the south of Bali, including Bukit,
• the relevant areas in Ubud.

The appeal of the Bali real estate market

Canggu significantly dominates the real estate market in Bali, accounting for a substantial 35% of the total listings. Uluwatu comes in second place in popularity with 18%, while Ubud follows with a share of 6%. The local real estate market demonstrates high profitability, attracting the attention of many investors who see it as a lucrative opportunity. According to Bali analytics expert Evgeny Zhuykov, the most interesting regions for real estate investments remain Canggu, Bukit, and Ubud.

Profitability of real estate in Bali

Real estate in Bali is recognized as one of the most profitable in the world. Experts point out that the net profit from selling apartments purchased during the construction phase averages around 44% over three years. When considering rental income, investments typically pay off within five to six years.

Price and yield dynamics

According to Anastasia Gorgieva, the director of international sales at Mirah Investment & Development, the cost of new buildings heavily depends on the successful implementation of the project. Over a period of one and a half years, a price increase of around 30-40% can be expected. The secondary market shows a price growth trend of about 6-7% per year. Rental properties on the island are in high demand, and the annual net income from rental properties can range from 13-15%, depending on their type and condition.

Specific examples of investments

As a specific example, when purchasing a property worth $200,000, the net rental income can reach approximately $30,000 per year. It's important to keep in mind that the rental market in Bali experiences seasonal fluctuations that coincide with tourist influxes. Renting out property is only possible through licensed companies that have the appropriate permits.

Factors affecting rental income

The profitability of rental properties is largely determined by the class and location of the properties, as well as other parameters. According to information from Balines Property, annual returns depend on different classes of real estate in popular areas of Bali and can vary. This diversity of conditions makes the market attractive to a wide range of investors.

State support for foreign investors

A significant factor is that the Indonesian government is actively attracting foreign investors through new long-term visa programs. In 2023, an initiative was introduced to issue visas for a period of five to ten years in exchange for investment contributions. The minimum investment amount is $350,000 and can be directed towards:

• acquisition of government bonds;
• shares of public companies;
• opening deposits in local banks.

The program "Second Home"

Additionally, in October 2022, a new program called "second home" came into effect, which allows foreigners to stay and work in the country for five to ten years, provided they have financial assets of at least 2 billion Indonesian rupiah, equivalent to about 130 thousand dollars. These changes in immigration policy make the country much more attractive to investors, opening new horizons in the real estate market for those interested in engaging in various businesses on this picturesque island.

Conclusion

So, summarizing the current state and prospects of the Indonesian economy, I want to note that the development of this country is a true example of resilience and adaptability. Indonesia, as the largest economy in Southeast Asia, demonstrates impressive growth rates rooted in its diverse economy, stable political situation, and increasing flow of tourists.

Dynamic and promising are not only the overall economic indicators — we are witnessing equally interesting progress in the real estate segment on the island of Bali. The drop in housing prices during the pandemic is now history, and today we see the market recovering with greater strength than ever. Interest from both locals and foreign investors is only increasing, creating optimal conditions for further price growth and a surge in construction activity.

Key growth factors

• Stable political situationprovides confidence for long-term investments.
• Increase in tourist flowcontributes to the growth of demand for real estate.
• Infrastructure developmentThe opening of a new highway and an international hospital improves the accessibility of the island.

Moreover, the focus on medical tourism and the improvement of infrastructure in Bali are opening new horizons not only for the local residents but also for visitors. The anticipated opening of an international hospital in 2024 will contribute to an influx of buyers looking to invest in real estate, while the new highway will significantly enhance the island's accessibility. The variety of projects and their long-term orientation bring confidence in the sustainable development of the region.

I am glad to see Indonesia becoming one of the most attractive and dynamic markets, drawing even more attention. The market is ready to offer investment opportunities that can quickly become highly profitable. It is important to keep an eye on changes and adapt to new conditions in order to fully take advantage of all the benefits that this amazing place has to offer.

In conclusion, Indonesia undoubtedly holds an important position in future global macroeconomic trends, and I confidently look forward to its continued prosperity.