A Market Update, A Look Towards Tomorrow
Bali Property Report
Island Update, Visa? Mungkin Bisa! and a Market Outlook for 2021
It has been an interesting few days as we have searched high and low for some fresh content to publish today. The results have yielded a mixed bag of good news from Trip Advisor along with a barrage of contradictions about the new protocols for coming in and out of Bali, followed by some professional opinions about the future of the property market in SE Asia.
Trip Advisor has named Bali the 2020 #1 Most Popular Destination in the World at a time when almost nobody can get in. (Aren’t ‘#1’ and ‘Most Popular’ the same thing?) I say let’s take out accolades where and when we can get them. It appears that there is not an awards committee at Trip Advisor; the winners are determined by the general public’s range of posts and feedback to the site. Bali has once again received the most praise from its’ loyal visitors. Why?
There are thousands of things to do here! Bali literally has something for everyone, in almost every interest and for all budgets: Lovers of nature; the beach, the forests, the rice fields, the mountains, other islands or even the colourful worlds found above and underwater and the activities that surround them; surfing, diving, fishing, rafting, and more. Archaeological sites, stunning temples, a vibrant living culture rich with rituals and ceremonies – a cultural heritage that lives both in the past and present. All on offer around each corner, no matter where your fancy takes you.
Art and music abound; museums, studios, galleries, workshops presenting both classic and contemporary tastes. Gamelan performances, live music venues and a wide range of beach clubs and nightclubs. Lifestyle and leisure offerings run the gamut from cheap and cheerful to outright opulence.
For the spiritual and health-inclined, wellness has become an industry unto itself here in Bali with an enormous range of services and products on offer to promote longer, healthier living. And don’t forget the yoga! Yogis and healers of all kinds are helping people everyday to return to a healthier way of living. Whole families, retired folks, honeymooning couples, holidaying friends, business conferences and more recently, digital nomads. Everyone, quite literally, is accommodated for here in Bali, which is just an extraordinary accomplishment for one island.
The irony of all of this of course is that while the world craves for Bali, the pandemic has meant that the island continues its long, hard struggle to stay afloat.
The only thing that remains certain is uncertainty. In different parts of Bali some police are taking the hard line issuing fines and enforcing the ‘push-up policy’ for offenders of the mask policies, while other ‘road blocks’ are handing out free masks and free food to those in need. Some reports say that the hospitals are full of patients fighting for their lives, other say that they are nearly empty. The designated quarantine hotels are full, that’s for sure. Turns out there is good money to be made all around in this quarantine business.
The policies regarding entry and exit to and from Bali shift like the sand. Business visas, visitor visas, residence permits all seem to be the Go one week, while next week, the rules are not as clear. To the credit of the local government it appears that they are trying to remain vigilant about curtailing the spread while at the same time allowing those who are healthy to earn a proper living. Policies are rolled out in 2 week intervals and they seem to remain flexible. As soon as the new 2 week window begins, the boundaries of the next 2 week window are being ironed out. It’s fluid, as we are all saying a lot these days. Best to consult an expert (Bali Business Consulting https://balibusinessconsulting.com) or two.
Onto the property sector.
I love quotes like this one from one of the industry leaders…
“The arrival of 2021 may not shake off all the challenges of a pandemic-riddled economy, but it could quickly establish itself as a year where Asia Pacific enters a new cycle of real estate growth, innovation and investment. We expect real estate investment volumes to rise 15-20% in 2021, driven by continued growth in appetite for assets with income stability.”
Prices in many areas are actually expected to rise moderately next year, given the range of low interest loans available and the easing of restrictions and re-opening of economies. New properties in Bali are hitting the market at what many industry experts consider to be true and accurate values, providing the necessary market corrections.
Office and Retail Space will be forever altered. Outmoded assets and outdated space across all sectors may become a defining theme from 2021 onwards. It is estimated that upwards of 40% of today’s office space will need some form of enhancement to stay relevant. The work-from-home experiment will leave a lasting impact. Businesses are now re-examining what the new workplace will look like following an extended period of forced working from home. Retail had already begun its departure from bricks and mortar and that trend will only increase. While some considerations are purely cost driven, businesses are undoubtedly thinking differently about how the workplace can effectively meet their employees’ needs. Workplace strategy will vary across the region based on sector, market, and cultural nuances.
Investors circling for distressed assets may be disappointed. While there have been some commercial assets traded at discounted levels in recent months, the optimistic view of a recovery in 2021 means that those looking for a bargain may have to move up the risk curve to find the level of discount that they seek.
Markets to watch in 2021: Senior living is expected to garner more interest from developers and investors all throughout the region. Bali is not an exception. With the increase in the quality of medical care so that international standards are now expected at several of the island’s top facilities, high quality medical tourism in Bali is not far away. Apart from the property ownership issues and the confusion that surrounds them, the lack of reliable health care has always been a stumbling block to what ought to be the next big wave of commercial real estate investment, both on a personal level and an institutional one as well. As those concerns are now being addressed and answered in ways that provide for an increase in investor confidence, the future of our market is quite promising. More innovative investment products, environmentally sound and properly priced – are paving the way to a more sustainable and well-rounded future.
2020 was an unpredictable year for the Bali real estate market and one whose repercussions will be felt for years to come. Hopefully in the positive ways mentioned already and more ways that we have not yet considered. In many ways, the lockdown accelerated trends already underway . We expect these trends to continue even after the lockdowns are lifted. We intend to be ready and to help you to do the same.
Contact Patrick on +628179733031/[email protected] to learn more about any of the topics above.