It’s hard not to fall in love with the tropical island of Bali, so it makes sense that many Aussies are deciding to either invest, or move there for good. The lure of sun, surf and sand is making Bali one of the world’s hottest island property markets in the world and despite rising prices, the demand continues to grow.
In Australia, buying a home can be seen as a near impossible dream, so it’s easy to see why Aussies are flocking overseas to invest, particularly to that sunny Indonesian Island. With their attractive Indonesian tax system, which exempts foreign investors from paying land tax (though Australians must pay the customary tax on offshore profits) investing in a vacation home is arguably value for money.
“Bali continues to be a magnet for foreigners. It is a popular destination and has large affordable houses that can be turned into rentals easily” explains David Chambat, CEO of Villa-Bali.com. “Australians represent about 20% of our villa owners in Bali.”
According to a recent report conducted by Villa-Finder.com, the Asia Pacific villa rental market is on the rise, with Bali accounting for approximately one-third of the total Asia Pacific rental villa market at $138m. While Europe and North America are still ahead; the report found that Asia Pacific is nipping at its heels as it accounts for $393m of the global $120b vacation rental market, growing at an annual rate of 18.3% (according to Statista).
In terms of return on investment, the busier areas such as Seminyak and Legian are slowing, due to almost unrestricted development and more competition. However investors are now looking to the north such as Amed and Lovina, with higher rates of rental returns. Overall, the average price of villas varies across destinations, which can range from below $100 to a few thousand per night. On average, a villa in Bali can return you around $250 per night.
But before dreams of sipping cocktails poolside saturate your mind, it is important to know that it is against Indonesian law for foreigners to own land in Bali. Despite this, there appears to be ways around this law, with Australians buying long term leaseholds to secure property. In this scenario, it is extremely important undertake due diligence by making sure your lease is registered on the property title. This way, if a property owner decides to sell, your lease is still in place. If still unsure, visit a local notary (similar to a solicitor) and consider buying through a reputable Balinese realtor.