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With the start of new year Bali
real estate market 2013 have noticed an increase in the domestic investment. Last
year it was predicted that more domestic buyers will invest in the real estate
market and it turns out to be true. In the time of global financial crisis,
Asia has domesticated itself from an investment standpoint, and it is true
especially in Bali.
The recent market survey report
shows that over 80% of the transaction in the real estate market are
Indonesians. Usually the foreign buyers dominated the domestic buyers in the past
but the latest trend has a completely different dynamic. Till last year most of
the real estate investors were from Australia, Hong Kong, Korea, Singapore, now
Indonesians have overtaken their market. Now, when we talk about the buyers in
Bali, there are two types of buyers in the real estate market: lifestyle buyers
and investment buyers.
The lifestyle buyers are usually
interested in the condo hotels. They buy the property because they either want
to have a second home, or they are investing in a hotel brand. But eventually
they want to go and use it. In the Indonesian market where the domestic buyers
have become more active, most of them are lifestyle buyers, and most of them
are coming from rising inspirational middle class in Surabaya and Jakarta.
Bali real estate is highly price sensitive
market and now due to the recent global financial crisis, price of properties has come down. People
were flocking to the condo hotels that are priced between $80,000 - $250,000 vs
the old market where villas were going for $0.5M to $1M. That has been a
dramatic shift. Now the buyers are more interested in the entry level
properties instead of the luxury properties as they used to be interested till
last year. One bedroom units have become the more popular property now. This does
not mean that the growth of the villa market has stopped, but yes the sales
figures have been down recently. There are various well marketing hotel branded villas that
have sprung up in the recent years and some of those names are Banyan Tree,
Bulgari, and Alila.
According to the current market
trend, it’s taking around 4 months to sell a good villas in Bali, on the other hand the
condo hotels sell within one month or even less. So you can see that there is a
huge disparity between these two markets.If we talk about the risk and return on
investment, Bali condo hotel market is still a risky investment, especially
where the guaranteed return is concerned. Now with so many entry level hotels
it is very doubtful if all the guaranteed return levels are really going to be
sustainable. And as soon as people fail to get guaranteed return they will put
the property back in the market, and you will get a resell market.
According to the experts, this is
inevitable, and it will probably happen in the next 12 – 18 months. And the
secondary resell market will be even more attractive to the buyers, because of zero
development risk. There will be more dramatic shifts in the Bali real estate
market during this year.
