Property Market Analysis in Bali: Trends and Projections for 2023

Demand:

The property market in Indonesia shows varied demand percentages in different price segments. As reported by rumah.com, the current property market is dominated by searches for properties as follows:

• The middle segment (300 million to 750 million rupiahs) has a strong demand of 18%.

• Premium properties in the range of 1.5 billion to 4 billion rupiahs also have strong demand, contributing to 34% of searches.
  
  
• Luxury properties (priced above 4 billion rupiahs) make up 18% of searches, reflecting significant interest.

Rental yields provide crucial insights into analyzing the property market. Daily rental prices, depending on the size, are usually leased at an average rate of around Rp2,281,000 per day. Specifically, for units with two bedrooms, the daily rental rate is approximately Rp4,123,000. Meanwhile, for units with three bedrooms and four bedrooms, the rental rates are around Rp7,000,000 and Rp6,300,000 respectively (Airbnb).

Knowing these daily rental prices is crucial for assessing the feasibility of a property development project for investment. Data indicates that villas with two to three bedrooms have the most promising viability potential.

Economic Projections for Bali and Its Impact on the Property Sector in 2024:

The economy of Bali showed positive trends in 2022 and is estimated to grow between 4.50% to 5.30% in 2023 (Bank Indonesia). This growth is primarily driven by the increase in the number of domestic and international tourists.

With consistent efforts and strategic measures, especially in promoting the tourism sector and fostering global confidence in handling the COVID-19 pandemic, it can be assumed that Bali’s economy will continue to grow in 2024.

The projections for 2024 include sustained economic growth, provided there are no major global disruptions. Bali may grow at a rate of 5.50% to 6.30% in 2024. This is supported by further improvements in sectors showing positive trends, such as tourism, trade, construction, and agriculture.

Inflation in Bali is well-managed and is expected to remain within the national target of around 3%±1% in 2023. In the projections for 2024, inflation in Bali is likely to stay stable, possibly approaching the lower limit of the 3%±1% range, thanks to balanced supply and demand dynamics.

Impacts on the Property Sector:

Increased Demand: With the improvement in the economic situation and the growth of tourism, property demand, especially in the tourism and hospitality sector, is expected to increase. This includes demand for hotels, resorts, villas, and other short-term rental properties.

Rising Prices: With the increase in demand and the potential for domestic and foreign investment inflows, property prices in Bali may experience appreciation, making it a lucrative sector for investors.

Construction and Development: Ongoing strategic projects, as seen in 2022 and 2023, are expected to continue into 2024. This indicates that the construction sector, which directly impacts the property market, will remain robust. New projects catering to both local residents and tourists, such as housing complexes, commercial spaces, and infrastructure improvements, could see an increase.

Sustainability: With the growth of the property sector in Bali, there might be increasing concerns about sustainable development. Ensuring that development does not negatively impact Bali’s natural beauty and cultural heritage will be crucial. Environmentally friendly and sustainable property development may garner attention.

Property Credit and Financing: With the banking sector showing positive signs and improved banking intermediation, property financing and mortgages may become more accessible and attractive. This could further boost demand in the property market, making it easier for both local residents and foreigners to invest.

Conclusion:

The year 2024 appears promising for Bali’s economy, with the property sector poised to be one of the main beneficiaries of this growth. However, strategic and sustainable development will be crucial to ensure long-term benefits for the island and its residents. The growth potential in the tourism and infrastructure sectors also signals attractive investment opportunities in Bali.