Out of the million-plus Australian tourists who visit Bali each year, more and more of them find themselves investing in the island.
Compared to the high real estate prices back home, buyers can snap up relatively affordable luxury beachfront villas replete with swimming pools and manicured gardens. There’s also the draw of the “rock-star lifestyle” in the form of 24-hour butlers, chefs, chauffers, and fabulous parties.
“If 10 people come through our door looking for property, four of them would be Australian,” said Matthew Georgeson, a leading voice in Bali’s property industry and director of Elite Havens/Knight Frank.
With a budget of $1.5m, buyers can acquire a 400 square metre to 500 square metre villa on about 1,000 square metres of land in Batu Belig, near trendy Seminyak. For comparison, the median house price in Sydney now sits just under $1.2m, according to the Domain Group.
However, under Indonesian law, foreigners cannot own property outright; instead, they can rent long-term or buy in partnership with a local.
Brian White, chairman at Ray White, said all the Ray White offices in Bali are performing exceptionally well.
“Villas are in big demand, [but] invariably the number of people buying for permanent living is much less than those seeking holiday homes,” White said. “Having said that, some Australians have quite extended holidays here, spending two to three months in Bali a year.”
According to urban designer and author Rodney Jensen, Bali suits the retiree market because long-term visas are available for those over the age of 65.
“It is much harder to get a visa if you are not in the retirement category,” Jensen said. “And if you are, you’re not allowed to earn money. Even if you have an Airbnb, they could deport you.”
Aussie entrepreneur Tony Smith, who divides his time between Bali and the Gold Coast, said Airbnb has deeply impacted the island’s rental market, causing rents to rise on some properties. He also said Aussies who want to rent out their Balinese homes must obtain a pondok wisata license (guest house license), which can be requested by the property’s Indonesian co-owner.
Despite the red tape, Australians make up a significant proportion of buyers, though Indonesians still make up most of the market, according to Georgeson. European and Singaporean buyers are also showing greater interest in Balinese real estate.
“Western Australians definitely make up the biggest numbers of [Australian] buyers, as well as a lot of people from Melbourne,” Georgeson said. “And there are always a few deals around as traditionally people hold an investment property for seven to eight years and then they want to sell it.”
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