Bali
Bali is Indonesia’s premier resort island, boasting all the major five-star hotel brands and spas that are continuously voted among the world’s best. Its coastlines are a surfer’s haven, and it has the culture and additional services to make it an ideal second home market. For this reason, the market is dominated by high-end villas, with many owners opting to rent them out for the greater part of the year. A variety of villa developments are on offer throughout the country, with styles and prices for high-end beach front villas with garden and a swimming pool ranging from US$400,000 to US$2,000,000 plus.
One incident that had an unfortunate effect on Bali’s property market took place in 2002, when several bombs exploded in and outside two nightclubs killing 202 people and injuring 209 more. In October 2005, several more bombs exploded again in Bali killing 23 people including three bombers. Today, however, it is picking up as buyers look for new alternatives from the pricier European locations and some of the more popular Asian markets, such as Thailand.
Popular locations in Bali include Jimbaran Bay, Bukit, the area from Batubelig to Tanah Lot on Bali’s West coast, the inland town of Ubud, and near the Handara golf course and Lake Bratan near Bedugul. Real estate pundits in Bali say these locations promise to produce the highest increase in value over the coming years.
Condos
Indonesia does not currently have a specific condominium law, which has restricted development on Bali to mostly villas. Although condo projects are becoming increasingly common, many buyers still opt to buy a plot of land and build an individual villa on it. There are however, a number of condominium developments available for foreigners set on this option. One such project is the luxury Outrigger Panorama Bali Resort & Spa. Set on Bali’s southern Bukit Peninsula on a cliff top location overlooking the Indian Ocean with neighbours such as the new BVLGARI, Alila and Banyan Tree resorts. The US$45million development, conceived and developed by Bali-based resort developers, mc², will be managed by Hawaiian-based hotel operator Outrigger Hotels & Resorts.
The resort will comprise 176 spacious studios, one, and two and three bedroom condominiums; including six duplex penthouses of 2,378 square feet. Some units will come some equipped with private swimming pools.
The resort has been designed by Original Vision of Hong Kong, led by architect Adrian McCarroll – well known in the region for his award-winning work on the Samsara Resort Phuket; whilst the Interiors are the work of Singapore-based company Plum, with principal designer Lisa Garriss at the helm. Facilities at the resort will include two restaurants, both with indoor and outdoor dining terraces, a wine bar, sports bar, spa, beauty salon; fitness centre, floodlit tennis court, jogging trail, juice bar, large pool plus private cabanas set beside the secluded lower-level infinity pool. Investors get a guaranteed return of 6 per cent for the first two years and 28 days per year use of their apartment per annum. Direct title ownership is provided for an initial period of 70 years. The project is located 20 minutes drive from Ngurah Rai international Airport and a 10 minute drive to Nusa Dua, Bali’s five-star shopping and sports district. Units are set to be priced from US$182,000 to US$1,150,000 and off-plan sales are now underway.
Houses and Land
Only Indonesian citizens are entitled to own freehold land titles. However, foreigners can own land through an Indonesian nominee. To help secure their claim to the land they purchase, many foreigners opt to take out a mortgage on the property, which has the effect of placing their name on the title. This prevents any transfers on the title without the foreign buyer’s consent to remove the mortgage. A popular option for foreigners in similar situations in Thailand is to put their property in the name of their Thai spouse, but this route is somewhat problematic in Indonesia. Under Indonesian law, Indonesian women without a prenuptial agreement with her foreign husband can be forced to forfeit all land in her name acquired during her marriage, to the government.
Because of the difficulties involved in placing property in the name of someone else, many foreigners choose to lease land which in Indonesia, can be taken for a period of 25 years. It is common practice for buyers to purchase two initial leases of 25 years which run consecutively along with a 25-year option on the second lease, effectively yielding a 75-year lease.
Another popular option for foreigners seeking to invest in Indonesia is by means of a PMA company, in which it is legally permissible for foreigners to hold shares in their name or in that of an offshore company. The company can then purchase land with a HGB title valid for 30 years, extended for 20 years and renewable for a further 30 years.
Land prices vary considerably depending on location but start at less than US$5,000 per are for plots in the interior, to 10 times that for seaview plots in the developed south of the island. In northern Bali decent beachfront properties are available for US$2000 an are, so US$100,000 would buy a reasonably sized residence. In the south however, buyers can expect to pay US$500,000 and upwards for a decent sized plot. According to regional experts a four-bedroom villa, 400-450sqm, would cost around US$500psm to build.
