When a Bali holiday is not enough

The popularity of Bali with Australian tourists has defied the doomsayers who thought it wouldn't last.
The popularity of Bali with Australian tourists has defied the doomsayers who thought it wouldn't last. Photo: Reuters

As Australians’ love of Bali defies the doomsayers who thought it couldn’t last, the number heading for Indonesia’s holiday island will pass one million annually for the first time in the next three years.

The demand for Bali holidays was merely set back, but not destroyed by the terrorism threat early last decade. The market is now maturing as more and more Australians consider buying property in Bali, in spite of daunting hurdles that restrict foreign ownership of land in Indonesia.

Apart from the record 790,000 Australians who holidayed there in 2012, the number of Australians permanently in Bali is also now heading for 10,000.

Construction is booming in Bali, but there are fears the market is overheated and heading for a bust.
Construction is booming in Bali, but there are fears the market is overheated and heading for a bust. Photo: AFP

And property prices are said to have increased by around 20 per cent in 2012, fuelled by an increase in demand from foreigners.

In fact, according to the local tourism newsletter, Bali Update, the local real estate market is so overheated, the country’s biggest financial institution, Bank Indonesia, fears it is heading for a bust.

Nevertheless, the bank’s Bali regional manager, Dwi Pranoto, admits: “In fact, the price of land in Bali, in real terms, is not so high.”

So in spite of the complicated system where foreign buyers must designate local nominee to buy or lease Bali property, there remains no shortage of demand.

Some of the expat brokers who now specialise in guiding Australian buyers through the bureaucratic maze reckon there’s the full range on sale, from million-dollar beachfront villas in fashionable areas like Seminyak north of Kuta, to homes with a pool for $250,000-$300,000 provided you’re prepared to settle for less than prime beachfront and look inland.

This is in spite of Bali’s well-known problems: a Third-World water supply that infects Westerners with “Bali Belly”, beaches that are strewn with rubbish because they are not systematically cleaned and increased traffic congestion as a teeming mass of trucks, cars and motorbikes are imposed on the island's cobbled streets.

A consultant at the Hospitality Institute of Asia, said, Fabrice de Barsy, told London’s Telegraph in April: “Bali didn’t take care of its infrastructure and environment. Bali has now become dirty, the traffic terrible and the landscape is getting spoiled by ugly construction.”

Bali isn’t protected from the chaotic boom conditions in the rest of Indonesia. “The luxury market is not doing that well as hundreds of cheaper hotels and condo-hotels are being built,” de Barsy says of Bali. “However, the country is doing well and a growing middle class can now afford Bali. Prices will keep going up, but on the very high end, a lot is for sale with nobody to buy.”

Would you ever consider buying property in Bali? Would you want to live there? Post your comments below.

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