Are You Ready To Buy A Villa In Bali?

Are You Ready to Buy a Villa in Bali?

In the Bali property market, supply has always outweighed demand. However, our market has differences to yours which warrant considerable thought as you assess the strength of your position – whether you are buying or selling. Are you buying/selling a Hak Milik (freehold) property or are you in the Leasehold market of buyers and sellers? At the risk of stating the obvious, if you are the latter, the length of the lease term that is already paid up is super critical. In a supply heavy market, the competition is fierce, and it is even more so given the challenges facing leasehold investors who are looking to invest from abroad. Ultimately, quality is king.

Quality of Location

The quality of your chosen location will always depend on why you are investing in a villa in Bali. Are you relocating the family to establish a new style of living? Then the entire island is at your disposal. Are you keen to find that charming and affordable investment villa that you and the family can use for a few weeks or even months each year while it makes you a decent income during the months that you are back home? Well then, certain regulations will dictate where you can invest.

Quality of Construction & Design

Are you building your own home? Renovating another? Or just hoping to be able to move in and not have to fix anything structural at all? Does the villa “work”? Is there a flow to it? Do you even want to try and raise your children here? Can you see yourself living and working from here or there for the next 10 – 15 years? If you can find a guy who is an architect/builder/home inspector prior to pulling the trigger on your purchase, you will likely have a friend for life. Take advantage of the experts who are at your disposal to learn the answers to the hard questions.

Quality of Acquisition Documents and Licenses

Does this villa sound like a good one for you?

Traditional 4BR Villa for Sale on Leasehold – Seminyak

  • 1000m2 garden
  • 15 meter swimming pool
  • Only 400 meters from the beach
  • Fully licensed for daily rental
  • Flexible management
  • Only USD295,000

            Assuming that the above set of details are true and that you are comfortable with the explanation of “flexible management”, the ‘paid up lease’ is only 12 years and there is no hope at all of extending the lease until – as the contract stipulates – 2032, then this may not be a good buy at all, at any price. For some buyers, it might actually be OK, in fact, just what they want. They are of a certain age, or have a certain fixed term plan for their lives in Bali, and they do not care what becomes of the villa after 12 years. For others, just the opposite is true.

There are as many versions of the lease agreement language surrounding leasehold extensions as there are grains of sand on the beach, but some basic principles seems to hold true across the board.

Find an agent upon whom you can reply for experienced knowledge on how to navigate the waters. For a lessee, we always advise keeping a good working relationship with the family that owns the land upon which your home sits.

If you’ve been thinking about buying a villa in Bali, you might be wondering if it would be better to hold off a bit until the global markets stabilize. Experts say there’s no perfect time to buy a house, and the best time is when it makes sense for you personally.

If you’re debating whether to buy a villa or wait, here’s what to keep in mind:

When Should You Buy a House?

Owning a villa has long been considered an essential part of Living the Dream. But it can also turn into a nightmare if you buy a villa overseas before you’re ready.
In a traditional market, advisors will tell you that you need steady income, good credit and a good handle on your debt. If you are new to our market here in Bali, you’ve learned the lessons of having to save cash to make the purchase as so very few of our transactions are not cash transactions. If you’ve got the cash saved up and your work future looks good, then NOW is the time.

Consider the Real Estate Market You’re In

Who is your competition and where are they coming from? In Bali, our buyers are from all over the world; as a buyer you have no way of knowing who is looking at the same villa and what they are willing to pay for it. Once you find a house you want to make an offer on, you should not delay.

Those market conditions will largely determine how much wiggle room you have when making an offer or counter offer. Our market here is very competitive. Vulnerable sellers have gotten pummelled. Sellers with an inflated view of their property’s values are scratching their heads in wonder as an active market seems to be passing them by. There’s a fair amount of cash in the market right now and buyers are coming in with offers as low as 50% of asking prices, testing the waters to feel out sellers’ levels of desperation. Many sellers have taken the bait and sold for well below market value while others are now kicking themselves.

The domestic airport terminal has been open for 6 months and in that time, several opportunistic buyers have taken advantage of some very favourable conditions. In many cases it has not been pretty. Many sellers have now seen their properties fall in the ranks of buyers’ interests and in hindsight truly wish that they’d taken the last offer they’d received.

Both buyer and seller must be prepared for disappointment in a competitive market. Counteroffers are common, and so is rejection. Even if everything is going smoothly, the seller may still be able to entertain and accept other offers. And even after a contract has been signed, issues can occur and the deal could fall apart.

There are things you can and can’t control during the homebuying process. One thing you can control is how high (or low) you’re truly willing to go. Set a tight range from the beginning and keep to it when you make your offer or a counter offer.
I don’t think there’s a magical formula to buying a villa in Bali. People just need to be properly informed. This is much easier said than done. This is Bali, still very much the frontier when compared to your traditional home-based markets. Choose your sources wisely. We have always held that if it’s the right time, then the right villa will come.

“The harder I work, the luckier I get.”


suggested reading

Buying From Abroad – Are People Doing That


Contact Patrick on +628179733031/[email protected] to learn more about any of the topics above.