bali leads indonesia's property market with surge in foreign investments
Bali has emerged as one of the most sought-after locations for foreign nationals seeking property in Indonesia. As of the first quarter of 2024, there has been a notable increase in demand from foreigners for various types of properties, including landed houses, land, and apartments.
Marisa Jaya, Head of Research at Rumah123, highlighted in a press release on April 1, 2024, that Indonesia's property ownership policies for foreign nationals have become increasingly flexible over the past decade. This regulatory relaxation has opened new opportunities for the property market to attract foreign interest.
Data from Rumah123 shows that during the first quarter of 2024, most foreign property searches were focused on residential properties priced between IDR 1 billion and IDR 3 billion, making up 34.7 percent of the interest. This was followed by properties priced between IDR 400 million to IDR 1 billion (25.7 percent) and those above IDR 5 billion, which accounted for 18 percent.
In 2023, ten regions saw the highest demand from foreign property seekers, with South Jakarta, Badung (Bali), and Tangerang (Banten) leading the list. Other popular areas included Bandung, West Jakarta, Batam, North Jakarta, Denpasar, Central Jakarta, and Surabaya.
Specifically, Badung in Bali experienced a remarkable 92.1 percent increase in property demand from foreign nationals compared to 2022. The property in Denpasar also saw an 81.3 percent rise, followed by Surabaya with 49.6 percent and North Jakarta with 46 percent. This trend is expected to continue into 2024, driven by the increasing interest from the foreign market.
Marisa emphasized that the growth in foreign property demand is expected to accelerate in 2024, particularly in the upper-middle and high-end market segments. The most popular property types among foreign buyers in 2023 were landed houses, land, and apartments, with landed houses being the most sought-after, ranging from 47.4 percent to 68 percent of searches.
Foreign nationals from countries such as Singapore (21.9 percent), the United States (16.1 percent), and Australia (11.8 percent) dominated the property market in Indonesia. Other significant contributors included Malaysia, Japan, South Korea, and China.
Policy change sparks demand
The rise in demand is attributed to policy changes, including the issuance of Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency Decision Number 1241/SK-HK.02/IX/2022 and the Second Home Visa introduced in December 2022. These regulations have lowered the minimum price benchmark for foreign property ownership and expanded ownership rights for high-rise apartments. On top of all that, tourists can now buy a property in Bali with just a tourist visa.
The popularity of Badung is further boosted by its status as a prime tourist destination and its appeal to digital nomads and remote workers. The region's commercial and tourism developments also contribute to its attractiveness, highlighting the potential for growth and investment in the area.
According to Gede Suardita, Chairman of the Regional Leadership Council (DPD) of the Indonesian Real Estate Association (REI) in Bali, the demand for property from foreigners has consistently increased, especially for villas. The new regulations have made it easier for foreign nationals to purchase properties legally using their personal identities, reducing the risk of ownership disputes.