PERCHED 100m above the Indian Ocean, the view from the villas promises to be dramatic. As far as the eye could see, the gleaming blue sea stretches out into the far horizon. Waves beat persistently against the foot of the limestone cliffs, as though demanding entry into the world of man.
This is Alila Uluwatu, a Shangri-la-like hideaway reminiscent of the utopia in James Hilton’s novel The Lost Horizon. The only difference is, this will be for real.
Unlike the mainstream hotels, the likes of so many international chains, Alila Uluwatu is a boutique designer hotel. But unlike its other hotels, this will be the first time the Alila Hotels and Resorts Private Ltd (www.alilahotels.com) is adding a residential component to its resort business.
The Singapore-based hotel operator has two other resorts in Bali, Alila Manggis and Alila Ubud, but these do not come with units for sale. The company also runs Alila Jakarta, a city hotel in Jakarta and a service apartment. The hotel operator is managing other hotels in Vietnam, Thailand, China and Maldives.
International sales and marketing representative Jasmine Teow says it has become a growing trend for hotels operating in Bali to have a parallel residential component due to the popularity of the island as a tourist destination.
Hence, it is putting up for sale 28 three-bedroom villas for sale with a starting price of US$2mil each. Teow says several of the units have been sold. Besides the three-bedroom villas, the 13.5-ha Uluwatu project will have five cliff-side villas and 50 one-bedroom villas, both of which the company will manage. The project also has a spa and other food and beverage facilities.
“We are known for our designer boutique hotels. The emphasis here is personalised, exclusive service amid an ambience that comes with character. What we are selling essentially is an experience,” says Teow.
Contemporary design in cultural Bali
She says there are three types of buyers – those who love Bali and have made this their annual holiday destination, investors and retirees.
The company has so far marketed the project in Hong Kong, Singapore and Jakarta since early 2006.
The marketing team in association with Colliers International was in Kuala Lumpur earlier this week for private appointments with potential buyers.
“Under the deal, Malaysians sign a long-lease agreement of 100 years. Indonesian law does not allow a foreigner to have freehold properties unless the buyer has an Indonesian spouse and the property is bought under the spouse’s name so this is an opportunity,” she says.
Teow says land values in Bali are generally forecast to grow at rates of 25% to 30% yearly. At any time during the construction process, usually nine to 18 months there, buyers are free to sell. In line with expectations of notable real estate agencies in Bali, conservative forecasts expect the villa prices to increase by between 10% and 20% yearly in the mid-term.
“In a fast rising market, this means a property could have a value well in excess of purchase price with returns already evidenced of up to 25%, giving buyers ample opportunity for capital appreciation,” she says.
A buyer will have to pay 30% of the purchase price of US$2mil over a period of three consecutive months, says Teow.
In a cash deal, the remaining outstanding balance will have to be paid for in the fourth month. Under a second payment option, the remaining 70% balance can be spread out in equal instalments, interest free, over the 18-month construction period or whatever the remainder of the construction period at the time of the purchase.
Under a third payment option, financing is provided up to 50%, with the first 10% due over three consecutive months and the next 20% payable in equal instalments, interest free, over the construction period. The remaining 50% will begin on completion of the villas with a maximum tenor of five years. There will be 60 equal monthly instalments of principal plus interest (in US dollars) at a rate of 12%. Design and layout plans are finalised during the initial three months.
“We have a generic layout and design and there will not be too drastic changes to it. There will be a furniture and fittings package on top of the furniture which are already included in the price,” says Teow.
The project is currently about 50% complete with 50 units of one-bedroom villa. A show villa for the three-bedroom unit is also ready. The three-bedroom villa sits on a land area of between 20,000 to 30,000sq ft with a built-up of about 8,000sq ft, each with a 60 ft x 13 ft pool. There is a monthly maintenance of about US$600 for the external upkeep of the villa.
The overall look and style is open contemporary with quite a bit of water features.
Teow says the developer PT Bukit Uluwatu Villas is moving away from the traditional Balinese style with the alang-alang (thatched roof) offered by an adjacent resort Bulgari. The Indonesian company is headed by Franky Tjahyadikarta and his partner while the architect is Australian-based Kerry Hill Architecture, which is also involved with the Alila Ubud and Alila Manggis resorts.
Teow says buyers have the option to return the unit to the operator in order for them to rent out the place on a 50/50 profit sharing basis.
“If an investor buys a unit and eventually wants us to operate it, we will check the place and replace any furniture or fittings which we feel are necessary to achieve that certain ambience and atmosphere,” says Teow.
The project is located on Dreamland Beach, where another resort Bulgari, which charges US$1,000 a night is located. Teow says there are other resorts coming up along the same stretch but they will not be close to each other due to the ruggedness of the terrain.
“We generally think of a beach as a place where one goes for a swim. This beach that Alila Uluwatu is located on is accessible via a lift as it is 100m below. It is more suitable for surfing, not swimming,” she says.
The project is located at the southern tip of Bali, in Pecatu, part of the Bukit area under the Badung Regency, about 20km from Ngurah Rai Airport, about 40 minutes away.
Showing posts with label Bali. Show all posts
Showing posts with label Bali. Show all posts
Friday, August 17, 2007
Monday, April 30, 2007
Bold new investment law
Bold new investment law
The new investment law that was approved by the House of Representatives on Thursday goes a long way toward addressing complaints often raised by foreign investors. But it does not sell the nation's resources to foreigners, as some civil society organizations here have alleged.
The law, in a bold way, gives equal legal status and equal treatment to both domestic and foreign investors, but that doesn't mean foreign and domestic investors are given the same business opportunities.
The legislation, which will replace the 1967 Foreign Investment Law and 1968 Domestic Investment Law, includes special provisions which require the government to reserve particular business fields exclusively for micro, small and medium-scale enterprises and cooperatives.
Other outstanding measures in the law that will most likely please both domestic and foreign investors are the stronger property rights granted to investors in specified areas: land cultivation titles of up to 95 years (now 35 years), building right to 80 years (now 30) and land-use title to 75 years (now 25).
These land titles do not constitute blank checks for domestic or foreign investors to exploit our resources because the rights are granted based on the fulfillment of strict requirements: The investment has a long gestation period, greatly contributes to strengthening economic competitiveness, does not need a large acreage of land and does not insult the public's perception of justice.
The new legislation also explicitly offers easier immigration procedures for obtaining residence permits and multiple entry visas. For example, investors are automatically entitled to a two-year residence permit, and this can be upgraded into a permanent residence permit after four consecutive years of stay in Indonesia.
The law grants tax incentives in the form of a reduction in the amount of taxable income, exemption or reduction of import duties and value added tax on capital goods, inputs and intermediate materials, accelerated depreciation and reduction in property tax burdens.
Similar to the 1967 Foreign Investment Law, the new legislation specifically protects investors from expropriation and guarantees them free repatriation of foreign investment capital and returns or dividends and salaries and wages of expatriate personnel.
The law promises a one-stop licensing and service center for investors. But if the government is really serious about expediting investment licensing, it must first review the cumbersome procedures and reassess the real purpose or merit of the dozens of permits an entrepreneur is required to obtain before starting up an investment venture.
Experience has shown that many of the permits imposed on investors have nothing to do with ensuring compliance with laws or government regulations. The government should be clear-cut about which of the existing permits can simply abolished, which can be delegated to private institutions with fiduciary responsibility, which must be issued by ministries in Jakarta and which are under the jurisdiction of local administrations.
Foreign investors will be especially pleased to know that, unlike the 1967 Foreign Investment Law, the new law does not require foreign investors to divest the majority of their shareholding after a specified period of time.
Like most other laws in the country, the effectiveness of the new investment law will still depend on implementation regulations, which will stipulate technical details of the law's provisions. This law requires at least four presidential regulations and dozens of ministerial decrees (rulings) to enforce its provisions.
But again, a good, strong investment law is only one of the prerequisites needed to woo investment. Investors will not change their negative sentiments towards Indonesia solely on the back of the new law as they will still judge how well the law is implemented. It is the interaction between policies and governance practices that investors assess before making the decision to plow their capital into the country.
Put another way, domestic and foreign investors are willing to stake their capital only when the general business climate meets the minimum degree of physical, legal and institutional infrastructure that allows for reasonable risk calculation.
Hence, the hardest part of the challenge to woo investment remains the same: strengthening law enforcement to minimize government policy-related costs and risks in taxation, customs, labor, mining, local autonomy and basic infrastructure.
The new investment law that was approved by the House of Representatives on Thursday goes a long way toward addressing complaints often raised by foreign investors. But it does not sell the nation's resources to foreigners, as some civil society organizations here have alleged.
The law, in a bold way, gives equal legal status and equal treatment to both domestic and foreign investors, but that doesn't mean foreign and domestic investors are given the same business opportunities.
The legislation, which will replace the 1967 Foreign Investment Law and 1968 Domestic Investment Law, includes special provisions which require the government to reserve particular business fields exclusively for micro, small and medium-scale enterprises and cooperatives.
Other outstanding measures in the law that will most likely please both domestic and foreign investors are the stronger property rights granted to investors in specified areas: land cultivation titles of up to 95 years (now 35 years), building right to 80 years (now 30) and land-use title to 75 years (now 25).
These land titles do not constitute blank checks for domestic or foreign investors to exploit our resources because the rights are granted based on the fulfillment of strict requirements: The investment has a long gestation period, greatly contributes to strengthening economic competitiveness, does not need a large acreage of land and does not insult the public's perception of justice.
The new legislation also explicitly offers easier immigration procedures for obtaining residence permits and multiple entry visas. For example, investors are automatically entitled to a two-year residence permit, and this can be upgraded into a permanent residence permit after four consecutive years of stay in Indonesia.
The law grants tax incentives in the form of a reduction in the amount of taxable income, exemption or reduction of import duties and value added tax on capital goods, inputs and intermediate materials, accelerated depreciation and reduction in property tax burdens.
Similar to the 1967 Foreign Investment Law, the new legislation specifically protects investors from expropriation and guarantees them free repatriation of foreign investment capital and returns or dividends and salaries and wages of expatriate personnel.
The law promises a one-stop licensing and service center for investors. But if the government is really serious about expediting investment licensing, it must first review the cumbersome procedures and reassess the real purpose or merit of the dozens of permits an entrepreneur is required to obtain before starting up an investment venture.
Experience has shown that many of the permits imposed on investors have nothing to do with ensuring compliance with laws or government regulations. The government should be clear-cut about which of the existing permits can simply abolished, which can be delegated to private institutions with fiduciary responsibility, which must be issued by ministries in Jakarta and which are under the jurisdiction of local administrations.
Foreign investors will be especially pleased to know that, unlike the 1967 Foreign Investment Law, the new law does not require foreign investors to divest the majority of their shareholding after a specified period of time.
Like most other laws in the country, the effectiveness of the new investment law will still depend on implementation regulations, which will stipulate technical details of the law's provisions. This law requires at least four presidential regulations and dozens of ministerial decrees (rulings) to enforce its provisions.
But again, a good, strong investment law is only one of the prerequisites needed to woo investment. Investors will not change their negative sentiments towards Indonesia solely on the back of the new law as they will still judge how well the law is implemented. It is the interaction between policies and governance practices that investors assess before making the decision to plow their capital into the country.
Put another way, domestic and foreign investors are willing to stake their capital only when the general business climate meets the minimum degree of physical, legal and institutional infrastructure that allows for reasonable risk calculation.
Hence, the hardest part of the challenge to woo investment remains the same: strengthening law enforcement to minimize government policy-related costs and risks in taxation, customs, labor, mining, local autonomy and basic infrastructure.
Friday, April 20, 2007
Landscape master
Landscape master
Bali’s famed resorts and clubs like the Como Shambhala at Begawan Giri, Amanusa, Bali Golf & Country Club all feature extraordinary tropical gardens designed by a certain Karl W. Princic.
Landscape architectural designer Karl W. Princic is considered somewhat of an enigma in his adopted homeland of Bali in Indonesia.
He has been in Bali since 1990 and now lives in an ultra-modern home set amidst Balinese cottages and padi fields in the sleepy hollow of Sidarkya near Sanur. He shares his newly-built home with his Indonesian wife and keeps mainly to himself.
Master of landscape art: Karl Princic has been living in Bali for 17 years. — JOHNNI WONG
Princic’s landscape schemes are in sharp contrast to the creations of the flamboyant Made Wijaya and Terry Hilliard, the other two well-known landscape consultants in Bali. The three are considered the best in the business for tropical landscape design.
Originally from California, Princic, 46, cites Thailand-based architectural designer Bill Bensley as the person who gave him his first break in the business when he was fresh out of college some 20 years ago.
Recalls Princic: “In California, you have to take an exam before you could call yourself a landscape architect. I was 25 when I took that exam and I ran into an old friend, Bill Bensley. He was wearing a batik shawl, looking like the world traveller.
“He told me how he was working in Asia and the greatest thing that he ever did was to get out of California. He was working for Belt Collins & Associates in Singapore at the time and he set up an interview for me.”
Princic adds: “I did have some reservations about moving to Asia. I told my parents that it was something crazy to do and that I was only doing it for a year – and now I am still here!”
Princic regards his academic training as “design intensive”: he was taught everything from “true design” to “plant material”. He graduated from the Californian State Polytechnic University in Pomona in 1983 with a degree in landscape architecture. He also completed courses in golf course design and construction techniques.
The main office of Belt Collins & Associates was in Honolulu and it had a branch office in Singapore. Princic spent three years with the firm as project manager.
From 1984 to 1986, he was a designer and project manager with Philips Brandt Reddick (PBR) in Irvine, California. In 1987, Princic served as a lecturer of architecture at the National University of Singapore.
“I came directly from California to Singapore. While based there, I had the chance to travel to Bali. And I quite liked it,” says Princic.
“At the end of the four years, I grew tired of Singapore, and moved back to Honolulu. At that time, I had clients who were developing the Bali Golf and Country Club. They said, ‘Come to Bali, do the project as a landscape consultant’. That was in 1990.
“The arrangements were flexible as I was the project landscape architect and at the same time, I had the freedom to open my own office. It was the perfect situation for me. I happily packed up and landed back in Asia, this time in Bali.
“I was really, really happy to be in Bali, and I still am,” says the architect.
Modern tropical style
Princic describes his style as “Modern Tropical”. Although he claims to appreciate what he calls the jungle style and the tossed salad style of landscape design, he considers them “not my thing”.
“I prefer to work in the context of modern architecture which is simple and restful,” explains Princic.
“I like and appreciate Made Wijaya and Bill Bensley’s work but that’s not what I do. Which is good, because clients looking for Made Wijaya’s style may not necessarily be our clients. My emphasis is more on ‘hardscape’ design with water features such as pools and decks rather than ‘softscape’ plants,” stresses the American architect.
“I prefer to make the landscape appear natural and not contrived – to look like it has been there all the while. Trees should appear to be truly existing there or to be naturally there. The landscape should not necessarily mirror modern architecture. I don’t believe plants should be planted in a ‘grid’.
Beautiful at night: The Bale Resort.
“We do get quite involved. Accent elements include modern sculptures, artefacts, primitive elements complement modern architecture very well; for example, nice old urns, sculptural fragments and architectural stonework – all goes well with modern architecture and modern landscape.”
Another of Princic’s design philosophy is to “limit the palette of elements”, for example, only one or two types of plants are used for group plantings.
Always in demand, Princic does not accept all jobs.
“Yes, I have turned down projects which I feel won’t turn out well. For instance, if a developer were to give me his plans and say he wanted some plantings here and there, in-between the buildings, I will tell him, ‘No’. I prefer to work together with the architect in coming up with the master plan from the very beginning. I don’t do left-over space.”
Bali’s famed resorts and clubs like the Como Shambhala at Begawan Giri, Amanusa, Bali Golf & Country Club all feature extraordinary tropical gardens designed by a certain Karl W. Princic.
Landscape architectural designer Karl W. Princic is considered somewhat of an enigma in his adopted homeland of Bali in Indonesia.
He has been in Bali since 1990 and now lives in an ultra-modern home set amidst Balinese cottages and padi fields in the sleepy hollow of Sidarkya near Sanur. He shares his newly-built home with his Indonesian wife and keeps mainly to himself.
Master of landscape art: Karl Princic has been living in Bali for 17 years. — JOHNNI WONG
Princic’s landscape schemes are in sharp contrast to the creations of the flamboyant Made Wijaya and Terry Hilliard, the other two well-known landscape consultants in Bali. The three are considered the best in the business for tropical landscape design.
Originally from California, Princic, 46, cites Thailand-based architectural designer Bill Bensley as the person who gave him his first break in the business when he was fresh out of college some 20 years ago.
Recalls Princic: “In California, you have to take an exam before you could call yourself a landscape architect. I was 25 when I took that exam and I ran into an old friend, Bill Bensley. He was wearing a batik shawl, looking like the world traveller.
“He told me how he was working in Asia and the greatest thing that he ever did was to get out of California. He was working for Belt Collins & Associates in Singapore at the time and he set up an interview for me.”
Princic adds: “I did have some reservations about moving to Asia. I told my parents that it was something crazy to do and that I was only doing it for a year – and now I am still here!”
Princic regards his academic training as “design intensive”: he was taught everything from “true design” to “plant material”. He graduated from the Californian State Polytechnic University in Pomona in 1983 with a degree in landscape architecture. He also completed courses in golf course design and construction techniques.
The main office of Belt Collins & Associates was in Honolulu and it had a branch office in Singapore. Princic spent three years with the firm as project manager.
From 1984 to 1986, he was a designer and project manager with Philips Brandt Reddick (PBR) in Irvine, California. In 1987, Princic served as a lecturer of architecture at the National University of Singapore.
“I came directly from California to Singapore. While based there, I had the chance to travel to Bali. And I quite liked it,” says Princic.
“At the end of the four years, I grew tired of Singapore, and moved back to Honolulu. At that time, I had clients who were developing the Bali Golf and Country Club. They said, ‘Come to Bali, do the project as a landscape consultant’. That was in 1990.
“The arrangements were flexible as I was the project landscape architect and at the same time, I had the freedom to open my own office. It was the perfect situation for me. I happily packed up and landed back in Asia, this time in Bali.
“I was really, really happy to be in Bali, and I still am,” says the architect.
Modern tropical style
Princic describes his style as “Modern Tropical”. Although he claims to appreciate what he calls the jungle style and the tossed salad style of landscape design, he considers them “not my thing”.
“I prefer to work in the context of modern architecture which is simple and restful,” explains Princic.
“I like and appreciate Made Wijaya and Bill Bensley’s work but that’s not what I do. Which is good, because clients looking for Made Wijaya’s style may not necessarily be our clients. My emphasis is more on ‘hardscape’ design with water features such as pools and decks rather than ‘softscape’ plants,” stresses the American architect.
“I prefer to make the landscape appear natural and not contrived – to look like it has been there all the while. Trees should appear to be truly existing there or to be naturally there. The landscape should not necessarily mirror modern architecture. I don’t believe plants should be planted in a ‘grid’.
Beautiful at night: The Bale Resort.
“We do get quite involved. Accent elements include modern sculptures, artefacts, primitive elements complement modern architecture very well; for example, nice old urns, sculptural fragments and architectural stonework – all goes well with modern architecture and modern landscape.”
Another of Princic’s design philosophy is to “limit the palette of elements”, for example, only one or two types of plants are used for group plantings.
Always in demand, Princic does not accept all jobs.
“Yes, I have turned down projects which I feel won’t turn out well. For instance, if a developer were to give me his plans and say he wanted some plantings here and there, in-between the buildings, I will tell him, ‘No’. I prefer to work together with the architect in coming up with the master plan from the very beginning. I don’t do left-over space.”
Friday, April 30, 1993
INVESTING IN PROPERTY
INVESTING IN PROPERTY
IN BALI, INDONESIA
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.
IN BALI, INDONESIA
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.
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.
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.
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.
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