Politics and the Bali real estate market

Politics and the Bali real estate market

A few months ago, elections were held in Indonesia. The new president intends to increase foreign investments in Indonesia. This mainly concerns large companies, but possibly also smaller investors who want to invest in real estate. The current government has already taken steps to attract these smaller investors, for example with the second home visa and the golden visas.


Indonesia is not the only country that has recently had elections. Several Western countries have recently had elections or will have them in the coming months, such as the United States, the United Kingdom, Germany, the Netherlands, and France. It may be a coincidence, but most of the inquiries we have received in recent months come primarily from these countries. Is politics in these countries a factor, or is it purely coincidental that the inquiries come mainly from Europe and the United States?


We cannot provide a reliable answer to this question; marketing or survey agencies would need to investigate. What we can say is that we often hear similar reasons from people who want to invest in Bali. Here is a small summary of those reasons:

  • The buyer no longer feels connected to their home country. The bond with the country has disappeared, and these buyers are looking for a new destination with more prospects.
  • The tax burden in the home country is too high, and buyers are looking for an alternative location with a more favorable tax climate. Often, these people consider besides Bali, also places like Dubai or other Emirates.
  • There is no good investment climate in their home country. The future prospects are not good, and these customers are looking for a solution to grow their capital elsewhere.

These are the main reasons we currently hear from real estate investors in Bali. These reasons have a certain relationship with the current political climate in their home countries. These customers do not expect an improvement in the situation in the short term, which is why many people are now turning their attention to Bali.


And why wouldn't one invest here? Investing in a new rental villa is still a very profitable option. A net return of between 10 and 15% per year is realistic. If the customer has the possibility to borrow cheaply in their home country, for example by taking out the equity in their own house, then this customer could realistically recover their investment within 10 years. As long as interest rates in the United States and Europe decline, this option of investing in a rental villa in Bali will become increasingly attractive. With the relatively short payback period, long-term loans are not necessary. With a net return of around 12.5%, your investment could be recovered in just 8 years.


Returning to politics here in Indonesia: it has been stable for years. Yes, there is also inflation, but the figures are lower than in many European countries. The economy is doing well, there is increasing prosperity, and a growing middle class. All of this makes the investment climate in Indonesia attractive.


Are you perhaps the next investor in a beautiful property here in Bali?

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