A Guide to the Bali Property Market Part 2.
Rental properties in Bali generate anywhere from 10% to 20% annual return on investment (ROI) which equates to a payback period of 5 to 10 years. Many factors will affect the earning potential or ROI of a property such as the amenities, design, build quality and of course, the location.
The age-old real estate investment mantra of "location, location, location" holds particularly true on the Island of the Gods. For anyone considering purchasing property in Bali, the first and most crucial consideration is the area in which to invest. Let’s take a pit stop and explore some of the neighborhoods in Bali that every prospective investor should know about – these locations are popular among tourists and foreign residents alike.
1. SEMINYAK
Seminyak, one of Bali's original tourism hubs, offers a wide range of experiences to suit different budgets. Visitors can enjoy a luxurious experience with a plethora of upscale hotels, guesthouses, restaurants, bars, nightclubs, beaches, and shops. At the same time, the area caters to budget-conscious travelers with affordable accommodations, local eateries, and street markets. Its central location attracts people from neighboring areas who come to experience its vibrant nightlife, beach clubs, and culinary scene.
Although Seminyak's popularity was eclipsed in recent years by neighboring Canggu, it remains a popular destination among international and domestic tourists. However, it is not a top choice for those seeking a permanent residence in Bali. As a primarily tourist-focused area, Seminyak was hit hard by the COVID-19 pandemic compared to Canggu, which has a larger population of foreign residents.
Still, Seminyak's heavy reliance on tourism makes it a promising location for investment properties intended for holiday rentals. As one of Bali's oldest developed areas, most properties in Seminyak are dated and not in line with current design trends. There is also a limited supply of modern villas for sale in the area, so prospective investors may need to purchase and renovate existing properties.
Looking ahead, Seminyak is poised to experience a strong recovery as tourism rebounds and exceeds pre-pandemic levels, making it a worthwhile prospect for investors seeking to enter Bali's tourism industry.
2. CANGGU
Canggu, along with surrounding areas, Berawa and Pererenan which are collectively typically referred to as ‘the Canggu area’ is the most popular location in Bali. The area started developing less than 10 years ago and quickly transformed into a vibrant, eclectic location, attracting visitors and new residents from all over the world. The area is home to an array of trendy beach clubs, cafes, bars, restaurants and many large supermarkets competing for business. It is a hotspot for surfers, digital nomads, and those seeking a more relaxed lifestyle. Given the high population of foreign residents, Canggu was the least affected by the COVID-19 pandemic among the prime tourist locations in Bali.
Real estate in Canggu has been a very active market in recent of years, with many new developments and luxury villas popping up to fill the demand for rental and holiday villas. The area has the highest property prices, and the rapid land appreciation has meant that developments tend to be on smaller plots of land with higher build density. As the area is almost completely developed, new developments tend to move further north or West of Canggu.
However, Canggu is also a victim of its own success, growing very crowded in a short time span with infamously heavy traffic making it challenging to move around the area. While still the most in demand location on the Island, many residents and tourists seeking to avoid the crowds and traffic are turning to other locations on the Island offering more relaxed lifestyles.
3. UBUD
Ubud is a vibrant cultural and spiritual hub that draws yogis, writers, and artists from around the globe. Its reputation as a global destination for yoga, spiritual tourism, and holistic lifestyle was enhanced by movies like 'Eat Pray Love’. This area boasts rich cultural heritage, surrounded by lush rice fields, temples, and traditional Balinese villages. It is also an excellent place to explore the best local cuisine and connect with Balinese culture, with many families opening their homes to visitors. Although its location at the center of Bali means it is further from Bali's beaches, it offers stunning jungle views that are popular with nature lovers.
Ubud offers a calmer lifestyle than the bustling Seminyak or Canggu, catering to a different crowd. Still, you will find many trendy boutiques, retail stores, hotels, and restaurants at the center of Ubud. It is a popular location for unique boutique hotels, including stunning bamboo constructions perched atop sweeping jungle views. Though there is a sizeable option of private villas for sale, the market is smaller than in Canggu or Seminyak, with new developments located on the outskirts. Property prices are generally lower, and rental revenues are also lower, but investments still command attractive returns.
4. The BUKIT PENNINSULA – NUSA DUA, ULUWATU & BINGIN
The Bukit Peninsula at the southernmost corner of Bali is a large area with different neighborhoods that have risen to become popular destinations. It is a large and stunning rocky headland known for its rugged coastline, white-sand beaches and world-class surf breaks. It is home to the popular locations, Nusa Dua, Uluwatu and Bingin.
Nusa Dua
Nusa Dua is an premiere tourist destination located on the eastern side of the Bukit Peninsula, with long stretches of white sand beaches with crystal clear waters. It is a pristine, carefully groomed exclusive location with a security check point to enter the area. The area is home to high-end international hotels, luxurious spas, fine dining restaurants, upscale shopping complexes, an exclusive golf course as well as world class convention centers used for international exhibitions and events such as the 2022 G20 Summit.
This location attracts travelers looking for aa refined vacation experience centered on high-end resort living and idyllic beach retreats. As a result of the area's significant development and prevalence of premium resorts, investment opportunities for properties in the region are limited.
Uluwatu & Bingin
Uluwatu, on the westernmost tip of the Bukit Peninsula and Bingin, on the northwestern corner are two towns within 10 minutes of each other. They share similar characteristics and are often collectively referred to as the “Uluwatu area”.
Uluwatu has long been a highly sought-after destination by tourists. Perched on a cliff overlooking the ocean, Uluwatu Temple is one of Bali's most iconic landmarks and a long-time favorite with tourists who come to explore the temple's beautiful architecture and experience the famous Kecak Fire Dance at sunset. The stunning cliff top views and high-end resorts make Uluwatu a particularly popular location for weddings and honeymoons. Other famous attractions of the area include New Kuta Golf, a word-class championship course located at the heart of Bingin and known for its challenging layouts and stunning ocean views.
Both Uluwatu and Bingin offer a unique mix of surf culture, luxury resort living and casual laid-back lifestyle and as a result, attract a variety of travelers. Despite the presence of some of the most luxurious resorts and exclusive beach clubs, the overall ambiance of these areas has remained low key and low density with a natural and relaxing charm that stands in stark contrast to the busy atmosphere of Canggu. Instead of the bustling nightlight scene found in Seminyak and Canggu, nightlife in Uluwatu and Bingin tend to be more relaxed and centered around sunset cocktails and live music at cliffside bars overlooking the ocean. Nevertheless, those looking for party scenes can still find them in venues like Savaya Beach Club, known for hosting some of the most famous parties in Bali.
In the past year, Bingin has taken the forefront as the corner of Bukit for modern private villas, pulling in both tourists and new Bali residents. It is evolving as a trendy location, popular among those wishing to avoid the crowds of Canggu in favor of a more relaxing lifestyle. Property investment opportunities are still limited compared to hotspots like Canggu, with few modern villas available to choose from. Investors seeking emerging and trendy locations with high potential for growth in a rapidly expanding market will find Bingin an attractive prospect.
