I think those who have an interest in real estate in Bali would agree that pre-2014, property prices here were out of control. But now they appear to be at levels we would consider being more normal for this market. It's hard to believe, but in most areas prices have actually gone down!
Despite this shift however, there are still many property owners out there (and also with agencies) who continue to market their villas at pre-adjustment prices. That's pre-2014 prices.
Unrealistic pricing problems
Not surprisingly many of these properties have been on the market since they first listed them and I'll have to admit it makes no sense to me. Nobody in their right minds wants to have their property listed for years, right? Unrealistic pricing will kill a deal before it gets started every time.
It's a buyers market and these over-priced properties just won't sell to a market that's more savvy, more price conscious and now has more choice.
Having said it's buyer's market, I'd also have to note here there has been an increase in demand, and this time it's a more realistic demand. Key areas we think are worth watching are Canggu, Sanur and Jimbaran, each with a specific niche to fill.
Be legal or else!
One important thing to take on board in 2018 and into the foreseeable future is around the question of permits. Now, for the first time local and national government agencies are taking strong steps to ensure permits allowing you to operate a villa business targeting the lucrative short term holiday rental market are correct, up-to-date with zoning regulations and most importantly, enforced.
Lease is also something we've spoken about for a while. The average length of a lease is around 30-45 years, with fair extension opportunities available. Compared to freehold ownership, lease options are a very feasible possibility as it makes the ROI game easier to achieve.
We do recommend though that you use a good legal adviser to write up your lease agreement, as the regulations around long-term leases are not usually well administered under current Indonesian agrarian law.
Similar to this:
Due Diligence Part 2: get to know your property and neighborhood
Should I insure my property in Bali?
3 Real Estate Myths In Bali
