Advantages of Bali as an investment direction

In recent years, Bali has increasingly attracted the attention of foreign investors, including those from Russia, Kazakhstan, and Ukraine.

This destination has become especially popular due to Indonesia’s stable economy and growth potential for returns.

However, selecting an investment property requires careful analysis, as not all areas of Bali are suited for quick payback and stable income.

Let’s explore what to consider if you plan to invest in real estate on the island.

Indonesia is the leading economy in Southeast Asia, with moderate inflation and a high level of resilience.

In recent years, the country’s economy has been recovering rapidly from global shocks like the COVID-19 pandemic.

For example, since mid-2021, Indonesia’s GDP has been growing steadily at 5% annually, while inflation has decreased to 2.86% by the end of 2023.

The real estate sector is a key component of this recovery, with its share in Indonesia’s economy continuing to increase.

According to forecasts, the real estate market volume could reach $81.24 billion by 2028, significantly exceeding current figures.

By 2023, Indonesia entered the top ten countries most attractive to foreign property buyers, thanks to favorable conditions and growing tourist flows.

Bali consistently ranks high among tourist destinations, attracting travelers from all over the world.

The rise in tourism positively impacts rental demand, making investments on the island increasingly attractive.

On average, short-term rentals can yield up to 12-15% annually, with some areas even higher.

The Most Attractive Areas for Investors in Bali

When choosing an investment property, it’s essential to consider the uneven infrastructure development and varying popularity of different areas among tourists.

The most popular areas are in the southwestern parts of Bali, including Canggu, Seminyak, and the Bukit Peninsula.

These areas show stable rental demand, making them especially interesting for investments.

Seminyak: High Demand and Stable Returns

The Seminyak area attracts tourists with its well-developed infrastructure, including various cafes, restaurants, and wide beaches.

The demand for rental housing in Seminyak remains consistently high, with average occupancy rates reaching 70% in 2023, peaking at 75% or more in some months.

This is due to the popularity of the area among tourists and the high rental rates, which increase annually.

Seminyak is also known for its rapidly rising rental prices in the premium segment.

According to various sources, rental prices for premium properties in the area increased by 26% since early 2023.

The average nightly cost in hotels and luxury apartments in this area has risen significantly, reflecting strong interest from tourists and investors.

Seminyak is so popular that there is almost no free land left for new projects.

New projects in the area attract significant attention, with most properties being sold before construction is completed.

This creates scarcity, and the value of existing properties continues to grow as well.

A Prime Location Does Not Always Guarantee Quick Payback

For investors on a limited budget, an alternative option could be apartments located away from the prime beachfront areas.

The cost of such properties starts at $130,000, though they often yield lower returns.

Rentals in remote complexes bring in between $30 and $70 per night, whereas beachfront rental rates range from $150 to $350 per night.

This leads to faster payback for investments in beachfront properties.

In the long term, high-end projects can offer returns on investment (ROI) several times higher than more budget-friendly options.

Conclusion

Investing in real estate in Bali offers the potential for stable income and long-term capital growth, but it requires detailed market analysis and knowledge of each area’s specific features.

This approach allows investors to select properties with maximum income potential and minimal risk.

To learn more about investment opportunities in Bali and view current listings, you can reach out to our consultant or visit our website.