Bali’s Property Market in 2019 and Beyond – 1/2

I’ve written before about where we think Bali’s property market is heading over the last couple of years. Now it’s time to re-visit and look at what 2019 and beyond have in store.

Bali is Asia’s #1 destination

TripAdvisor recently published their Travelers’ Choice Awards for 2019 and Bali was given the title of #1 best destination in Asia and #5 best destination in the world. That’s pretty impressive. Lombok even made its mark by ranking in the top #25.  

I think this will only get better and it won’t be much longer before Flores and other superb destinations across the world’s largest archipleago will also be recognised for their natural beauty and almost mythical “paradise found” status.

This is part of a remarkable journey, as Indonesia claims its place as southeast Asia’s powerhouse. It’s not so much “the winter is coming,” but more like “the summer is here!”

Hotel developments and zoning

But there are also causes for concern.

The massive promotion and exposure that Bali gets has seen uncontrolled development in recent years, particulalry in the regency of Badung, which includes Nusa Dua, Kuta, Seminyak and Canggu and there have been loud voices calling for an end to more hotel developments.  

These have become less vocal recently however, as Bali’s government becomes much firmer with enforcing zoning regulations and the issuing of permits attached to property. 

The latest zoning map and green belt areas for example, are now supposed to be set in stone for the next 20-years.

Kuta to Legian

Price is always a sensitive issue in any market, especially when that market grows and supply increases. But to suggest there has been a “Price War” is not altogether true.

What is true is that some areas do see low prices and low occupancies, but this has mainly been focused in certain low-end areas in the back streets of Kuta and partly into Legian, which are more popular with the less savoury sort of visitor Bali could well do without.

Older hotels in these areas are struggling and they’ve seen a negative asset value; in fact, it’s very likely some of them have debts larger than their current worth.

The truth is at some stage measures need to be taken by all stakeholders because things have to change.

Legian to Seminyak

From the northern part of Legian into Seminyak business seems to be close to normal. The area does experience traffic congestion and overbuilding around the main streets, but in general most resorts are doing well and have managed to find balance between their Chinese, Australian and European markets. 

Digital Nomads in Canggu

North Seminyak and into Canggu is where the “madness” begins and it doesn’t look like it’s going to end anytime soon.  It’s not mad as in dangerous! It’s mad because of how popular it’s become so quickly.

A constant supply of globe-trotting Hipsters, Digital Nomads, long staying guest, Eco-aware (not Eco-perfect) travelers and health food joints seem to be the ones tapping into this popularity by acknolwedging global tourism trends and embracing the local culture for all the right reasons.

Bali’s rich culture heritage

People are learning about Tat Twam Asi (the idea of being one with the universe by embracing the belief that I am you and you are me), Tri Hita Karana (three causes of well being: 1. harmony among people, 2. harmony with nature or the environment and 3. harmony with God) and other aspects of Bali’s rich cultural heritage and fusing it with new energy and new life.

This more ‘enlightened’ market is staking claims around the Bukit and its world-class surf breaks and beaches and luxury resorts. They like to party as much as the Seminyak crowd, but in a more ‘civilized’ way’ it seems. And then, of course, there’s Ubud, but that’s another chapter in itself.

We believe this is helping Bali, some might even say it’s saving the island from a few neo-colonial-long-term-self-serving expats, read: the ‘special ones’ – those that think they are entitled and should be the ones to decide Bali’s future, not Made or Wayan, who they believe, would do well to stay at home and continue to make a living from farming rice. These are the same people who don’t like to see more visitors come to Bali, especially foreign ones, not because of the traffic or because they help the economy grow, but because they don’t feel so unique or special anymore.

Sustainable community development

I believe Bali needs these ‘enlightened’ forward thinking souls working with important and relevant sustainable community issues, especially around garbage and plastic (a ban on single use plastic bags came into effect on January 1 this year) and water (Bali’s governor Koster broke ground on the new Sidan Dam on April 4) and infrastructure.

We’re not overtly political at Seven Stones but we do support the current administration and if all goes well on Election Day on April 17 and they get 5-more years in power, we think these social and community initiatives will gain momentum.

The impact of mass tourism

Mass tourism developed in the second half of the 19th Century in the United Kingdom and according to most reliable sources was pioneered by a company called Thomas Cook & Sons (who still exist in the same business) who offered holidays to the ‘masses’ or ‘common people.’ And it hasn’t really stopped since then.

Now the word ‘mass’ is perceived with quantity rather than social class and there are challenges in managing the facilities and services associated with large numbers of visitors.

Certain areas for example, would do well to follow the direction of Thailand and The Philippines who both recently took the bold step of temporarily closing down popular and over-exploited destinations in efforts to clean up the mess created by too many people with too much trash.

Bali too must take things seriously. We have to be serious about how we use water and treat our waste so we don’t destroy the very things that have been attracting people to come here in the first place.

The good news is we can feel the winds of change and these important issues are finally getting the attention they deserve. They need more of course, but we have started.

 

Harcourts Seven Stones is a property company headquartered in Bali, Indonesia, with a mission to help people who are interested in buying and selling residential and commercial real estate.

If you’re thinking about property, ROI, capital gains or lifestyle investments in Bali, Jakarta, Surabaya, and Indonesian’s Eastern Islands and need some friendly advice and guidance then why not email hello@sevenstonesindonesia.com or check out Seven Stones Website | Seven Stones Linkedin | Seven Stones Facebook

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Andrzej Barski

Director of Seven Stones Indonesia

Andrzej is Co-owner/ Founder and Director of Seven Stones Indonesia. He was born in the UK to Polish parents and has been living in Indonesia for more than 33-years. He is a skilled writer, trainer and marketer with a deep understanding of Indonesia and its many cultures after spending many years travelling across the archipelago from North Sumatra to Irian Jaya.

His experience covers Marketing, Branding, Advertising, Publishing, Real Estate and Training for 5-Star Hotels and Resorts in Bali and Jakarta, which has given him a passion for the customer experience. He’s a published author and a regular contributor to local and regional publications. His interests include conservation, eco-conscious initiatives, spirituality and motorcycles. Andrzej speaks English and Indonesian.

Terje H. Nilsen

Director of Seven Stones Indonesia

Terje is from Norway and has been living in Indonesia for over 20-years. He first came to Indonesia as a child and after earning his degree in Business Administration from the University of Agder in Norway, he moved to Indonesia in 1993, where he has worked in leading positions in education and the fitness/ wellness industries all over Indonesia including Jakarta, Banjarmasin, Medan and Bali.

He was Co-owner and CEO of the Paradise Property Group for 10-years and led the company to great success. He is now Co-owner/ Founder and Director of Seven Stones Indonesia offering market entry services for foreign investors, legal advice, sourcing of investments and in particular real estate investments. He has a soft spot for eco-friendly and socially sustainable projects and investments, while his personal business strengths are in property law, tourism trends, macroeconomics, Indonesian government and regulations. His personal interests are in sport, adventure, history and spiritual experiences.

Terje’s leadership, drive and knowledge are recognised across many industries and his unrivalled network of high level contacts in government and business spans the globe. He believes you do good and do well but always in that order. Terje speaks English, Indonesian and Norwegian.

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Ridwan Jasin Zachrie

CFO of Seven Stones Indonesia, Jakarta

Ridwan is one of Indonesia’s top executives with a long and illustrious career in the financial world. He holds several professional certifications including being a Certified Business Valuer (CBV) issued by the Australian Academy of Finance and Management; Broker-Dealer Representative (WPPE); and The Directorship Certification for Directors and Commissioners, issued by the Indonesian Institute of Commissioners and Directors.

His experience includes being the Managing Director at one of the top investment banking groups in the region, the Recapital Group, the CFO at State-owned enterprises in fishery industry and the CEO at Tanri Abeng & Son Holding. He’s also been an Independent Commissioner in several Financial Service companies and on the Audit and Risk Committee at Bank BTPN Tbk, Berau Coal Energy Tbk, Aetra Air Jakarta as well as working for Citibank, Bank Mandiri and HSBC. His last position was as CFO at PT Citra Putra Mandiri – OSO Group.

Ridwan has won a number of prestigious awards including the Best CFO Awards 2019 (Institute of Certified Management Accountant Australia-Indonesia); Asia Pacific Young Business Leader awarded by Asia 21 Network New York USA (Tokyo 2008); UK Alumni Business Awards 2008 awarded by the British Council; and The Most Inspiring Human Resources Practitioners’ version of Human Capital Magazine 2010.

He’s a member of the Board of Trustees of the Alumni Association of the Faculty of Law, Trisakti University, Co-Founder of the Paramadina Public Policy Institute and actively writes books, publications and articles in the mass media. He co-authored “Korupsi Mengorupsi Indonesia” in 2009, which helps those with an interest in understanding governance in Indonesia and the critical issue of corruption. Ridwan speaks Indonesian and English.

Per Fredrik Ecker

Managing Director of Seven Stones Indonesia, Jakarta

Per is the Managing Director of the Seven Stones Indonesia (SSI) Jakarta office and has more than 25-years’ experience in Indonesia, China, and Western Europe. He previously worked in senior management positions with Q-Free ASA, Siemens AG, and other companies in the telecom sector. Over the last six years, he has been the Chairman of the Indonesia-Norway Business Council (INBC) and recently become elected to be on the board of EuroCham Indonesia.

His most recent experience is within Intelligent Transport Solutions (ITS), Telecom, and other sectors within the Indonesian market. He is today through his position in SSI and by representing Norway Connect, promoting Nordic and European companies that would like to explore business opportunities in the Indonesian market. He’s also playing an active role to help create the Nordic House concept in Jakarta that will provide an excellent platform for Nordic companies entering Indonesia, where they’ll find a community that can offer support with trusted information and affordable services to enter this market.