Bali Hotels & Hotel Residences Market Report March 2021

Overview

While Bali’s tourism industry has been battered from the ongoing impact of the global pandemic, the island’s real estate sector has experienced a rapid shift in demand. Indonesia’s barrier to overseas travel has, in an unlikely turn of events, stimulated a new wave of luxury property sales, mostly in the villa segment. A substantial trend in luxury villa sales has been revealed in our research in the secondary market, which has been driven by domestic buyers from Jakarta and Surabaya. Transactions have been mixed mostly between prime properties in Greater Canggu and South Bali at premium prices and the other end of the spectrum stress-driven discounts across a broader area.

 BALI’S HOTEL RESIDENCES: SALES PRICE VS. SALES PACE FOR VILLAS AND CONDOMINIUMS

Another key impact of Covid-19 has seen foreign buyers already in Indonesia adopting a work-from-home lifestyle and purchasing homes. This is especially prevalent in Canggu and the rapidly expanding West Bali coastline. We expect this to continue to trend, with a younger, digitally-enabled demographic profile emerging. Increasing interest from international buyers from Singapore, Hong Kong, and other city-based buyers from Europe and North America looking at resort locations across Asia to live and work from home is a new constant in our Asia-wide market research. Despite the vibrancy in overseas investment into Bali, there remain no new significant changes in Indonesia’s foreign ownership laws nor pandemic-driven incentives to date.

Meanwhile, land sales and property prices have remained extremely active, especially for residential project development and individual luxury-oriented villas. Domestic buyers are the key players in this sector, with competition high for prime sites and maturing locations.

One market that has seen sharp declines is hotel-branded or branded residences developments. Given stress in the tourism market and saturation of condominium hotels, we expect this class of real estate to remain sidelined for the remainder of 2021. Given many of these projects are focused on foreign buyers who are presently unable to visit Bali, there is little reason to expect a rebound in transactions until the broad international tourism market returns.

Looking at resort-grade real estate projects for sale in Bali, our research shows that condominiums still exceed a 60% share, though the villa segment is poised to grow. Primary sales volume over the past year totaled USD 272 million, which is approximately a third of pre-COVID transaction levels.

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