Property Report: 5 Ways
5 Ways the Virus Has Changed the Real Estate Landscape in Bali
The Bali real estate market is currently more active than you may think. Whether you are buying or selling, there are opportunities to get into some great properties at fantastic prices or to sell what you’ve got to a market that is hungry for a bargain.
1. Shorter leases are available
In the booming days of Bali’s real estate market (pre-2012), when a vendor approached most agencies with a leasehold property for sale that had fewer than 20 years remaining on the initial tenure, not very many listing agents would take on the listing. There was simply no demand as the market had not yet developed a useful understanding of the leasehold extension dynamic. As the market’s ‘fear of the extension’ subsided, gradually more and more 15-20 year leasehold properties began to appear on the websites of Bali’s mire high profile agencies.
In this time of Covid, we now have both willing buyers and sellers in the 5-15 year leasehold market. Generally entry level pricing is affordable enough that the buyer’s are seeing value for money regardless of the extension dynamic at all.
2. An increase in new Bali residents.
As life in the cities has become, well, what it has become, many families are leaving the cities and seeking the greener pastures (rice fields) of Bali as the new family hub. While city life offers conveniences and choices that may not be handy in Bali, the market is clearly telling us that those city amenities no longer have the shine they once did, and the allure of beaches, mountains and the ever present rice fields can quickly replace the confines of the concrete jungles.
3. Home Inspections via FaceTIme
Choose your App. FaceTime and WhatsApp have worked well for us. Zoom came out of nowhere and grabbed a ton of market share. Is SKYPE going to become the next MySpace?
While there is no replacing a stroll through the “real thing”, at most price points and with most willing buyers, the ad-hoc virtual tours can narrow the range or even produce “the One”. Many buyers are choosing not to wait until the airport opens for tourism traffic again.
4. Cash producing villas are now for sale
Our market has for the most part always been a market in which our investors tend to own multiple properties here and abroad. As the cash flows of these feed one another from time to time, the drought in our market for many has simply placed too much strain on their domestic (and easier to manage) properties so that they are now VERY WILLING to sell their Bali investments to prop up some sagging shortcomings back home. This means that they are willing to let go of very good cash producing assets here in Bali. It will take 12 months to return to full speed on the rental side for sure, and that condition will be reflected in the settlement price.
5. Hak Milik Properties are Highly Negotiable (Mostly)
For both residential and commercial use, our position is that Hak Milik (for the domestic market) and HGB and Hak Pakai for the foreign market) is the wisest of all investment options, provided that you can find what you truly need in the price range that you can afford to invest. Hak Milik/HGB/Hak Pakai properties can typically cost between 2 and 3 times (and more) of what the same property would cost on a lease, depending of course on the length of the term and the language of the extension clauses. Tax benefits, licensing requirements and collateralization are chief amongst the reasons that the elevated titles bring.
To schedule an inspection/walking video tour of any of our fine properties or to have a phone call to discuss your Bali real estate strategy, please reach out to Patrick on +62 817 973 3031/[email protected]