Buying property in Bali has become increasingly attractive, drawing in investors, digital nomads, and retirees who are all captivated by the island’s appeal and lucrative real estate market. But purchasing Bali property is a big step that involves understanding local regulations, market trends, and investment options. Whether you’re after a high-yield investment, a long-term residence, or a mix of both, this guide is here to walk you through all the essential details of buying property in Bali.
Why Investing in Bali Property is Worth It
Bali’s property market has soared in recent years, and for good reason. The tropical climate, stunning landscapes, and steady tourism influx create an environment where demand for rentals is consistently high. Buying property in Bali is more than just a financial investment; it’s a chance to tap into an island lifestyle that appeals to a wide array of people, from tourists to long-term expats. Current Bali real estate trends reveal rental returns of 15–40%, depending on location and property type. This return rate alone has cemented Bali’s place as a top real estate destination worldwide.
Choosing the Best Areas for Buying Property in Bali
Where you decide to buy property in Bali can greatly impact your returns and living experience. Here’s a breakdown of the top locations:
- Canggu and Berawa: Known as Bali’s “hipster capital,” Canggu and Berawa are among the most popular areas for foreign buyers. With trendy cafes, beach clubs, and amenities like international schools, these areas are ideal for families and investors alike. Rental yields in this area are some of the highest, reaching up to 40% in some cases.
- Seminyak and Petitenget: As tourist hotspots, Seminyak and Petitenget draw in vacationers seeking luxury. Properties here command premium rental prices due to the area’s beachside vibe and access to high-end dining and nightlife.
- Ubud: If tranquility is your goal, Ubud is a haven for wellness seekers and retirees. Although rental yields may be lower compared to coastal areas, Ubud properties attract long-term renters seeking a calm environment.
- Uluwatu and Bingin: Famous for their clifftop views and surf culture, Uluwatu and Bingin are fantastic for high-end villa rentals. Investors drawn to breathtaking landscapes will find these areas offer some of the most picturesque settings in Bali.
Types of Property Investments in Bali: Villas, Land, and Beyond
Bali’s real estate market offers several property types, each with unique investment potential.
- Turnkey Villas for Rental Income: Villas are ideal if you want immediate rental income, with short-term rentals yielding average annual returns of 15–25%. Daily rental rates in high-demand areas like Canggu and Seminyak can reach $300–$700 for luxury properties, depending on the season.
- Land or Early-Stage Developments: Purchasing land or off-plan developments is a popular route for those looking to secure high returns on completion. Bali real estate market guides indicate that early investors often see up to a 50% appreciation upon project completion. However, these investments require a bit more patience, as they take longer to yield.
- Long-Term Residences: Thinking of making Bali your permanent home? Building or purchasing a ready-made home allows you to benefit from Bali’s real estate market while enjoying the island life. Custom-built homes offer the advantage of tailoring your property exactly to your lifestyle.
By aligning the property type with your investment strategy, you can better achieve your financial and personal goals in the Bali property market.
Join the community & start your journey today
Bali Property Costs and Budget Considerations
The cost of buying property in Bali varies based on factors like location, property type, and amenities:
- Villas: Mid-range villas start around €150,000, but high-end villas near the beach or in exclusive areas can reach €1 million or more. These properties are popular among both investors and luxury vacation renters.
- Apartments: A more budget-friendly option, apartments range from €60,000 to €150,000, making them ideal for those looking for a low-cost entry into the Bali real estate market guide. Apartment rentals, especially in trendy areas, can still yield decent returns.
Due to Bali’s comparatively affordable property prices, investors from all walks of life find Bali’s market appealing. This affordability is another reason investing in Bali property in 2024 is a trend expected to remain strong.
Navigating Bali’s Real Estate Regulations: A Quick Overview
Understanding the local regulations is essential when buying property in Bali as a foreigner. Here’s what you need to know:
- Property Ownership Options: Foreigners are generally not allowed to own land directly in Indonesia. However, you can legally acquire property through leaseholds or by setting up a foreign-owned company, known as a PT PMA, which grants land-use rights.
- Leaseholds: The most common option for foreign buyers, leaseholds allow you to lease land or property for a set period, typically 25–30 years, with renewal options.
- PT PMA (Foreign-Owned Company): For those seeking greater control, setting up a PT PMA is a popular route. This structure allows you to acquire Right to Build (Hak Guna Bangunan) or Right to Use (Hak Pakai) on property, though the setup requires legal assistance.
Working with a professional property consultant can simplify this process and help you avoid costly mistakes in the Bali real estate market. A knowledgeable agent will guide you through local laws and handle paperwork, ensuring a smooth transaction.
Steps to Buying Property in Bali for Foreigners
Here’s a step-by-step overview for foreign buyers looking to invest in Bali property:
- Due Diligence: Find a reputable property consultant to verify property titles, land use rights, and zoning.
- Set Up a PT PMA (if applicable): If you choose this ownership route, your property consultant can assist with the company registration process.
- Signing a Sales Agreement: Once the paperwork is in order, a preliminary sales agreement is signed, followed by the payment of a deposit.
- Obtain Necessary Permits: If you’re planning to build, secure building permits (IMB) and ensure the land is zoned for your intended use.
Navigating Bali’s real estate market might seem complex at first, but with the right guidance, the process can be both rewarding and profitable.
Have any questions?
We would be happy to assist you
FAQ
Foreigners cannot directly own land in Bali. However, they can lease property for 25–30 years or set up a foreign-owned company (PT PMA) to acquire land-use rights.
Top investment areas include Canggu and Berawa (popular for high rental yields), Seminyak and Petitenget (luxury and tourism-focused), Ubud (for tranquility and long-term rentals), and Uluwatu and Bingin (known for breathtaking views and surf culture).
Bali offers villas for immediate rental income, land or early-stage developments for long-term appreciation, and ready-made homes or custom-built residences for personal use.
Foreigners can purchase property in Bali through leaseholds or by setting up a PT PMA to acquire land-use rights. Zoning laws and building permits are essential considerations for foreign buyers.
Rasmus Holst is a serial entrepreneur and Co-Founder of COCO Development Group, where he helps drive innovation and growth through strategic business development. He is also the Co-Founder of Estate of Bali and Regnskabshelten.dk, Denmark’s fastest-growing accounting firm, which grew to 35 employees and generated $2.5M in turnover in 2023. Rasmus is passionate about building businesses that create long-term value and impact.
