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Property business still booming in Bali (29/07/2013)

The property business in Bali continues to flourish as investors are confident about the island’s business climate, thanks to the increasing number of tourists and ongoing infrastructure improvement.

Most of the investors are focusing on developing hotels, condotels (joint condominiums and hotels) and private villas.

Gede Semadi Putra from the property committee of the Indonesian Chamber of Commerce in Bali (Kadin Bali) said Thursday that land demand for hotels, villas and condotels was booming, but the supply of land was decreasing.

Not only is less land available, but most of the land on offer is leasehold tenure. Property offered with freehold tenure is now difficult to find.

“Unlike in the past, many Balinese people now prefer to lease their land long-term rather than selling it, especially in tourist areas, like Kuta, Legian and Seminyak. Even if they sell, the price could be very high. The problem is that not all investors agree with leasing, they prefer to buy,” he told Bali Daily.

He said that despite the extremely high land prices, strong demand meant that the market was still able to absorb it.

“The market has yet to reach the saturation point that will cause stagnant prices. Until the end of this year, the outlook remains positive.”

He cited Jimbaran as a booming property area, with more and more investors looking to buy property with sea views on the area’s hills and cliffs.

The ongoing improvements to infrastructure, including the expansion of Ngurah Rai International Airport and construction of the Benoa-Nusa Dua toll road and Dewa Ruci underpass, had positively affected investor’s confidence and increased property business targets, he added.

According to property consulting company Elite Havens-Knight Frank in its recent research Bali Property Update released recently, over the last few years until present, the property market in Bali has remained favorable for both local and international investors, in line with Indonesia’s economic growth.

The increasing number of domestic and foreign tourists to Bali has boosted market optimism and driven prices to continuously rise. Bali is still considered a safe location for investment amid the global economic uncertainty.

The research also found that the property market in Bali was mostly driven by demand from local investors, mainly from Jakarta and Surabaya.

The price of land in Bali continued to show an upward trend during the first semester of this year, with an average increase of 28 percent in a number of strategic locations. Last year recorded the highest percentage increase, at 43 percent.

“The price will continue to show an upward trend through the rest of this year, both in coastal and non-coastal areas, and is predicted to record a higher increase compared to previous years,” said Matthew Georgeson, managing partner of Elite Havens-Knight Frank.

The lucrative property market had also attracted other investors, whose core business was not property, he said.