Are you wondering how much Bali real estate is selling for in 2023?
Are you thinking of selling your property this year and would like to know what price you could realistically achieve?
Or are you considering investing by buying property in Bali and need a solid guide to understand what constitutes fair market value?
The problem is that it is very hard to obtain trustworthy and relevant data about what gets sold at how much in the Bali property market.
The reason is that there are practically no statistics about real estate sales besides the local housing market, which is monitored by Bank Indonesia, the central bank.
The luxury property market remains very much in the obscure and one never really knows how much a property sold for, except if you are the transacting notary or the real estate agent involved in the sale.
Beware, there are many fantasy tales about what this or that property has sold for.
Here is a guide to walk you through the most important factors determining the price of a property in Bali.
Average Bali Housing Market Prices
If you read Bank Indonesia’s latest report on the development of the housing price index from 2018 to the end of 2022 for the city of Denpasar, you will find that there is an increase of just over 2% over the last four year period.
This doesn’t reflect at all what is going on in the luxury real estate market, which is not covered by the above index.
To understand Bali’s luxury property market, we have to base our analysis on information from notaries and our own observations as real estate agents to truly understand what’s going on.
During Covid-19, i.e., from 2020 – 2021, prices dropped quite a bit compared to 2019. The market was thin, with very few active buyers, mostly Indonesians, looking for distressed properties sold at a bargain. This changed dramatically in mid 2022, with the return of foreign tourist arrivals and ease in travel restrictions.
Since then, prices have gone up and we are now well above prices quoted in 2019.
Here is an example:
Today, a villa in Canggu with 3 bedrooms and a swimming pool sitting on 500 m2 of freehold land and located within 1 -2 kilometers from the beach, will cost you IDR 12.5 billion or USD 840.000.
In 2019, the same house would have cost you IDR 8.5 billion or USD 570.000. That’s an increase of 47%!
What has happened?
Factors Affecting Price Trends
In the first place, prices for land in the south of Bali went up a lot. Let’s stick to our Canggu villa example mentioned above. The price for freehold land in 2019 would have been IDR 1 billion (USD 67.000). In 2023 it went up to a whopping IDR 1.5 billion per are (USD 100.000), an increase of 50%.
Secondly, buildings costs went up as well. In 2019 the square meter built under roof would have cost you something like IDR 9 million for a good quality construction using local materials. Four years later, the same house would cost you IDR 12 million per square meter. That’s an increase of 33%.
And last but not least, the profit margins developers are able to realize in 2023 are also slightly higher than before.
Whilst the above comparison is true for the south of Bali, the land price situation is quite different in more distant locations, like the northeast coast around Tejakula or the northwest coast around Pemuteran. Here land prices have remained more or less what they were in 2019 and are only slowly going up. But this will change, as the South becomes less and less attractive and overall road infrastructure improves and those more remote destinations can be reached more quickly.
Eventually, it all boils down to the good old real estate adage of “location – location – location”.
This is and remains the most important factor affecting value and price of a property.
If you are smart about choosing a location that hasn’t peaked yet, you are well set for a solid and rewarding capital appreciation of your investment.
A tip: with beachfront you can never go wrong, even in more remote locations!
Type of property
The type of property you chose will most obviously affect the price quite dramatically. You may build or buy a simple local type of a house with 1 bedroom, a kitchen and living room on less than 100 square meters of land and get away with a price in the tune of USD 50.000.
On the other hand, a villa on a sprawling estate built with the finest materials money can buy will set you back easily by USD 5 million – and we are not even on the beach.
Building costs increase dramatically when you start using imported materials like marble from Carrara and a kitchen from Germany.
Mind you that there are excellent local materials available in Bali and there is really no need to import stuff. Be green - think of the environment and buy local!
Property accessibility and infrastructure
Last but not least, accessibility and surrounding infrastructure are of huge importance too. If you can only reach your property through a 2.5 m wide dirt road that floods in rainy season or from a main artery that is always “macet” (congested), then that’s not a factor that will positively impact the value of your property.
Relative closeness to shops and restaurants and the airport are important factors for most buyers and will affect the price of a property positively.
How much is the average house in Bali?
Spoiler alert! There is no average house in Bali. But if we take our example villa from Canggu and minimize the building cost and move it to a less popular location, where land prices didn’t go through the roof yet, then one could say the average price for such a house would be approximately IDR 3.5 billion or USD 200.000. Happy?
Interested in buying your own Bali property?
If reading this blog made you wonder what your money could buy you in Bali, or how much you could sell your property for, you should contact our Bali based real estate agents now and find out.