Friday, April 30, 1993



Buy an Existing Villa or Build for Yourself ?

If you are interested in buying an existing villa in Bali, please keep in mind that all better houses are owned by foreigners who have financed their vacation home in foreign currency. If they agree to a sale they understandably wish to recover at least the same amount they originally spent in US or Australian dollars, Euros, or any other currency.

The important advantage of purchasing an existing villa is that you can carefully inspect all details before making a buying decision and therefore know exactly what you get for your money. You will be immediately the owner of a completed villa - usually fully furnished - so you can either move in yourself the next day or start generating a return on your investment by renting your villa out.

Alternatively – if you have lots of time to supervise the construction of your dream home yourself – you can acquire a plot of land and build your own villa. The disadvantage is that you'll have all the worries and responsibilities connected with building a house anywhere in the world.

In Bali this can be a truly frightening experience, especially if you are not personally on-site all the time, do not speak Balinese or at least Indonesian, and are not a construction expert yourself. Even when you appoint the most reputable architects and contractors, you have to be present yourself to achieve satisfactory results!

Most people ask for top quality, fast completion, and low cost. Be aware that, if you're lucky, you can perhaps achieve two out of these three points, but never all three together! The choice is yours.

The third option is to buy a land & villa package from a reliable developer experienced in building in Bali. This way you won't have any worries or problems during the construction period, and you deal with foreign experts who understand what you say AND what you mean.

Click here to see details about two high-quality villas currently for sale at the "BALI IMPIAN ESTATE", a development on the "Bukit" (hill) on Bali's southern peninsula offering spectacular views of the ocean and Bali's mountains.

Purchase Prices, Land & Construction Costs

To give you some idea about prices: existing high-quality villas with garden and a swimming pool which have been built a few years ago start around US$400,000 and can go up to US$2,000,000 and more.

This is over 50% less than comparable villas in other tropical destinations such as Phuket (which is much less attractive and has a much longer rainy season than Bali). However, there are very few good-quality villas offered for sale in Bali, and they are usually sold within a very short period. We do not recommend to buy one of the many cheaply built houses as they are difficult to rent out and their maintenance costs are often very high!

Land prices range currently from US$50 to US$300 per square meter (11 square feet) depending on the location (in the middle of nowhere you might still find land for less than US$20). A plot not too far from the beach and the tourist areas in South Bali will cost today about US$70 to US$150 per square meter. If it's located right on the beach, offers a spectacular view or is part of an up-market development, it can be US$300 and more per square meter. Properties in crowded Denpasar and in Ubud are again priced much higher.

Keep in mind that property prices in Bali have appreciated VERY substantially during the past few years. Many foreigners have bought land and numerous Indonesians have acquired properties in Bali as they feel safer here than in other parts of the country. Even after the terrorist attack in 2002 property prices continued to increase – investors regard that attack as a one-time incident which does not change Bali's long-term development.

The basic construction cost of good quality residential buildings is right now about US$500 to US$1,200 per square meter. This does not include any access roads, site preparation and development, water and electricity supply, swimming pool, water pumps or filtration, waste water treatment, power generators, landscaping, architects and consultants fees, costs for the many licenses and permits required, etc.

Please also note that all US dollar prices quoted are based on an exchange rate of about 8,900 Rupiah per US dollar (click here to see the current exchange rate) and are continually increasing. If you build yourself don't try to safe money by cutting corners. This will only inflate your subsequent maintenance costs and make renting out your villa quite difficult!

Which Areas of Bali are Most Recommended ?

LOCATION is the most important factor — in Bali as anywhere else in the world. Land prices in beach front and town centre locations and properties offering spectacular views will increase most, and houses on the beach or offering a great view will be the easiest to rent out if you do not want to live in them yourself throughout the year.

Most recommendable are (in our opinion) locations in Jimbaran Bay and on the Bukit (the hill on the southern peninsula between Nusa Dua, Ulu Watu, and Jimbaran), the area from Batubelig to Tanah Lot on Bali's West coast, in or very near the town of Ubud, and near the Handara golf course and Lake Bratan near Bedugul. These locations promise in to produce the highest increase in value over the next few years. In the long term, the area between Tanah Lot and Negara as well as the coastal areas in Bali's North-East should also show attractive price increases.

Calls grow for foreign property ownership

Calls grow for foreign property ownership
Monday, February 27, 2006

Anissa S. Febrina, The Jakarta Post, Jakarta

Many long-term expatriate residents here cannot consider Indonesia a welcoming second home when they are barred from owning property here.

"Property ownership is the core around which one builds one's life. Why should foreigners be handicapped here?" complains Robert Eskapa, a British businessman who has opened a pizza-chain in Indonesia.

"Many foreigners are forced to buy property through some firms here. The firms buy them on our behalf and we end up paying them up to US$100 a month for such a service."

Restrictions on foreigners owning property here, as stipulated in a 1960 law governing use of land, water and space, have been blamed for deterring investment and helping add to the high-cost economy.

With the government revising the land law, property analysts and developers are joining expatriates in urging its expeditious passage.

Currently, foreigners are only entitled to the rights to use, cultivate and build property for a maximum period of 25 years.

"The maximum period varies between provinces, depending on the policy of the local administration," National Land Agency (BPN) legal bureau head Reiner Manurung told The Jakarta Post.

The policy has deterred investment in several regions, particularly areas with sizable expatriate communities.

"Many Singaporeans, for instance, are interested in owning shop-houses and opening businesses in Batam, but the regulation discourage them," he said.

In contrast, foreigners can purchase property and seek local financing support in Singapore, developer Far East Organization (FEO) said.

The Indonesian market is a prized target for Singapore realtors. FEO, which will launch sales of its Orchard Scotts condominium here in March, said foreign nationals accounted for 44 percent of high-end property buyers in the city-state last year.

With lending interest soaring as high as 20 percent, and risking hurting property take-up, foreign investment would help pick up the slack and revive the sector.

Chief analyst at the Center for Indonesian Property Studies Panangian Simanungkalit said Indonesia would benefit from following the example of its neighbors in opening up its property sector, especially in areas such as apartments.

A CIPS study revealed that the apartment subsector alone contributed 17 percent, or some Rp 12 trillion (about US$1.3 billion), to total Indonesian property market capitalization.

The chairman of the Indonesian Real Estate Association, Lukman Purnomosidi, estimated the country could reap at least $10 billion in foreign investment in the next five years should it decide to open the sector.

"That's only the potential in seven major areas -- Jakarta, Batam, Medan, Pekanbaru, Bali, Lombok, Makassar and Manado," he said.

BPN land information deputy head Chairul Basri Achmad said the revised draft might contain a clause extending a leasehold period for foreigners to up to 50 years.

"We hope it will be applicable by the end of 2006," he said.

Although the draft revision of the land law has been completed, BPN still needs to hold public consultation sessions before submitting it to the House of Representatives, Chairul said.

For Eskapa, the sooner such foreigner-friendly policies are introduced, the better it will be for the investment climate.

"It's not like we are going to cut out the property or land and take it away from this country," he added.

Analysts say it's time to open up property sector

Analysts say it's time to open up property sector
Tuesday, February 28, 2006

Anissa S. Febrina, The Jakarta Post, Jakarta

Giving foreign nationals greater property rights in Indonesia could absorb up to US$10 billion in potential investment and make the sector more resilient in times of crisis, a property analyst says.

"The time is just right to give more access to foreigners. We can expect a significant amount of investment that will absorb more capital into the real sector," Indonesian Property Studies (CIPS) chief analyst Panangian Simanungkalit said Monday.

A CIPS study found that opening only 30 percent of property units -- ranging from apartments, office space to malls -- to foreign ownership could contribute $10 billion of investment in the next five years.

Property analysts and developers have called for the government to revise the existing regulation barring outright foreign ownership of property and to extend the leasehold period to up to 99 years to attract more investment. The government is currently in the process of revising a 1960 law on the use of land, water and space.

Currently, foreign nationals are only entitled to leasehold titles for a maximum period of 25 years.

The CIPS study showed that, in Jakarta alone, the sector could gather at least $2 billion investment if 30 percent of the available 65,000 high-end apartment units were sold to foreign investors.

According to property research firm Jones Lang LaSalle, about 70 percent of serviced apartments in Jakarta were rented to foreigners.

"That does not include those who rent houses in Kemang, Pondok Indah, Kebayoran and Menteng," LaSalle national director Lucy Rumantir said.

The study also showed that if a similar percentage was provided for the office and commercial subsector, there would be potential investment of $2.1 billion and $4.2 billion respectively.

The Indonesian Real Estate Association also identified Batam, Medan, Pekanbaru, Bali, Lombok, Makassar and Manado as areas with potential for foreign investment in property.

Panangian said Singapore, Thailand and Malaysia, which have opened their property sectors to foreigners, have benefited from the policy.

"When the (economic) crisis happened, foreign investors also shared the bursting of the bubble, so they also put in an effort to make the situation better instead of running away when the property sector collapsed," he said.

The local property sector was hard-hit by the economic crisis that struck in 1997, with numerous developers crippled by soaring debt when the rupiah sunk to an all-time low against the greenback.

The sector did not start to rebound until 2003 when its market capitalization reached almost Rp 50 trillion, a tenfold improvement on its value in 1999.

Development of the sector continued to improve until soaring interest rates curtailed developers' aggressive expansion plans.

Panangian said foreigners currently had to rely on informal gentlemen's agreements with locals to buy property because they could not own the units themselves.

"It is not legally binding and if the locals aren't trustworthy, it could give Indonesia a bad name," he added.

Land reform expert Gunawan Wiradi said the government still needed to apply restrictions in opening up the sector to foreigners.

"It should be opened but controlled," he added.

Non-nationals may be allowed to buy property

Non-nationals may be allowed to buy property

Andi Haswidi, The Jakarta Post, Jakarta

The government seems likely to issue a long awaited regulation next year allowing non-nationals a restricted right to own some forms of real property, such as apartments, in a move that is expected to further fuel the growing property market, Indonesian Chamber of Commerce and Industry (Kadin) chairman Muhammad S. Hidayat said Friday in Jakarta.

While it remains unclear precisely what types of property are involved, Hidayat said that President Susilo Bambang Yudhoyono had, in principal, agreed to open the country's property market to foreign buyers.

"It was agreed during a discussion last month with the President, National Land Agency (BPN) chairman Joyo Winoto, property developer Hendro Setyawan and myself, that a form of foreign ownership would be legalized in 2007," Hidayat said.

Speaking at the annual meeting of the Indonesian Real Estate Developers Association (REI) in Jakarta, Hidayat said a presidential regulation would likely be issued to permit foreigners to own some forms of real estate as revising the existing Real Property Law would take too long.

"There is a legal breakthrough on the cards. We expect that it will take the form of a presidential regulation. I have suggested that title take the form of a fixed-term building use right (HGB), up to a maximum term of 70 years," he said.

Under a 1996 regulation on foreign property ownership, foreigners are only allowed to purchase fixed-term HGB titles up to a maximum of 25 years. However, besides the term being very restrictive, the regulation has never actually been implemented on the ground.

As a follow up to the discussion, Hidayat said, the BPN chairman had invited REI members, notaries and other stakeholders to participate in further discussions with a view to drafting the new regulation.

"Hopefully, the regulation will be put on the books in 2007. Given this, I hope that foreigners will become more willing to invest in Indonesia," he said.

Hidayat, who was also a former REI chairman, said that the real-estate industry had long been urging a change in the regulations so to allow non-nationals to purchase real property in Indonesia, but progress had only recently begun to become apparent.

Indonesia lags far behind neighboring countries, such as Malaysia and Singapore, in opening up its property market to foreign buyers.

By comparison, Malaysia allows foreigners to purchase property under 99-year leases, while Singapore permits freehold ownership in the case of apartments located higher than 6 stories.

"Giving foreign buyers a chance to own property here is highly desirable. Not only will it benefit the property industry, but it will also support foreign investment in the country as a whole," he said.

Regarding the prospects for the country's property market next year, Hidayat said the industry was set to enjoy further growth thanks to an expanding economy and the recent fall in interest rates.

"The central bank rate has dropped considerably, from higher than 11 percent to what we have now, 9.75 percent. The government expects economic growth to reach 5.8 percent this year, and further increase to 6.3 percent in 2007. All this will undoubtedly produce a more conducive climate for the property industry," he said.

However, Hidayat added that the banking sector had been very slow to bring down lending rates in line with the reductions in the BI rate.

"I've been told they will need at least one year to bring down their lending rates so as to match the central bank," he said.

Investing in Property & Real Estate

Investing in Property & Real Estate
in Bali, Indonesia

Steady Increase in Capital Value.
Guaranteed Return on Investment.
Improvement in Lifestyle.

Why Invest in a Villa in Bali?

Whether you simply want to live somewhere else, retire one day in Bali or are looking for a good return on your investment, the fundamental reasons for choosing Bali are basically the same:

A wide range of attractions combined with good infrastructure and convenient airline connections have made this beautiful island extremely popular as a tourist destination and home of choice for many foreigners.

Because of this, and the still reasonable prices, property investment on the island has been generating high regular returns, and property values have continued to appreciate even during difficult times.

What's so Special about this Island?

Annual Reader Surveys by major travel magazines continually confirm the perception of Bali as the most enchanting travel destination in the world. The friendly people and the absence of security problems guarantee a completely relaxing stay. Because of the physical beauty of the island and its wide variety of attractions, Bali is seen by many experienced travelers as the "Ultimate Island".

(If you've never been to Bali before, or haven't been there recently, and you want to find out what's going on, have a look at "BALIGUIDE.COM – a Continually Updated Insider's Guide").

Living in Bali

Communication have been improving every year (nowadays Broadband Internet connection is no problem), and frequent direct flights connect Bali with many places around the world.

There are several International Schools on the island and a wide range of imported food and drinks is available. Full-time cooks, maids, gardeners, drivers, etc. are easily affordable which means you can live very comfortably in Bali at low cost.

Medical services are provided by local hospitals and international clinics such as International SOS and the "Bali International Medical Center" (BIMC) which both use overseas experts for tele-diagnosis. If you need to see Western doctors, both Singapore and Perth in Australia are only a short flight away.

If you want to do business, you can register a PMA (Foreign Investment) company which will entitle you (and your dependents) to a Resident Visa and Work Permit. Retirement Visas are available for anybody above 55 years of age.

The Bottom Line

Buying or building a beautiful villa in Bali you can rent out when you're not using it yourself has become attractive for many tourists, working expats, future retirees and keen investors.

It is (still) much cheaper than buying a villa in places such as Phuket and Samui in Thailand, and Bali does not have the long rainy season or security problems you find in many other countries. Flying time to reach Bali or Thailand is about the same from most places in the world.

Even more important: If you invest in a top-class villa in Bali you will receive a guaranteed income from having it rented out when you're not staying there yourself without any hassles or responsibilities. You can also expect a steady increase in value.

This is because if your villa meets our quality standards, will offer you a lease with guaranteed income for the months you don't occupy your villa yourself. We will also manage your property and pay all regular expenses and maintenance costs during the time of the lease agreement.

When you decide one day it's the right time, you can apply for a "Retirement Visa" and live permanently in Bali.

Legal Requirements & Options

Before investing in property in Indonesia you should look through these legal requirements:

* Can Foreigners Own or Rent Property ?
* The Property Laws in Indonesia.

After you have become familiar with the different options for foreigners who wish to invest in property in Indonesia, please look at these financial issues:

* Build Yourself or Buy an Existing Villa ?
* Purchase Prices and Construction Costs.
* Recommended Areas in which to Own a Villa.

How to Proceed? can help you find villas offered for sale by their owners and/or we can help you find land on which to build your own villa. We can recommend architects and contractors if you wish to handle things yourself, and tell you our experiences with them.

To review details of all the legal documents required, clients will obtain a copy of the standard contracts from us before they consult a lawyer or notary. It's most important you have the land titles carefully checked by a reliable local notary before you go ahead fine-tuning and executing all contracts to acquire the land and build your villa.

High-Quality Freehold Villas for Sale

Right now offers two completed villas for sale: the "Bali Impian Residence" is located on the "Bukit" (hill) on the Southern peninsula; "Villa Mahayani" is on the way to Canggu about 3 miles/5 km after Jalan Oberoi.

In addition to the expected appreciation in the property's value (about 10% to 20% p.a.), investors will enjoy free management and maintenance as well as a net return of 5% to 8% per year from these freehold properties.

Villas such as these two properties are the best choice for keen investors. The price is not much higher than for lease-hold villas of the same size and quality, but instead of a lease which expires after 20 or 30 years the resale value of these is expected to be a multiple of the original investment after some time.

Leasehold Properties

If you don't want to commit US$400,000 or more for a vacation villa or future retirement home but expect to receive an attractive return on your investment starting soon, the acquisition of a leasehold property will be the right solution for you. has very recently secured three smaller villas in an excellent location in Tanjung Benoa and has renovated these properties. These "Sport Villas" feature two and three bedrooms and are set in private gardens with small swimming pools. Guests have access to a 23m lap pool and free use of an on-site tennis court. Bali's best beaches, all watersport facilities and the Nusa Dua Golf & Country Club are nearby. Prices are US$120,000 to US$180,000.

Land and Villas in Other Parts of Bali

If you're interested in properties or land located elsewhere on the island of Bali, right on the beach, for instance, please contact us by telephone or e-mail at and let us know what kind of property you're interested in.