Property investment in Bali is becoming increasingly attractive to foreigners and international investors, offering high returns and paradise in one of the world's top tourist destinations. However, there are several key factors to consider when deciding whether to invest in a hotel or buy a villa in Bali. While both options offer unique benefits, investing in a hotel may offer more advantages in terms of yield, flexibility and growth potential.
Why Bali's Hotel Market Is Booming
Bali is more than just a holiday destination, it is a global tourist hotspot, with over 6 million visitors per year before the pandemic. The tourism sector is gradually recovering, and with increasing interest from local and international travellers, demand for hotel accommodation is growing rapidly. This demand makes investing in a hotel an increasingly attractive option for investors looking to capitalise on Bali's thriving tourism industry.
Hotels in Bali are flexible, allowing investors to enter the hotel sector without the burden of managing a villa or house. Many investment hotels operate under well-known international brands, providing stability, brand recognition and a constant flow of guests.
Important. it is not necessary to buy an entire hotel. It is possible, but a large amount of investment is required. It is enough to buy 1-2 rooms at the construction stage to get a stable guaranteed rental income and the opportunity to holiday in Bali 1-2 times a year for 2 weeks without having to pay for accommodation.
Bali Tourism Statistics
Bali's property market has recovered significantly in 2024 thanks to a steady increase in the number of foreign tourists. In the first seven months, the number of tourists rose from 429,537 in January to 628,985 in July. This tourism boom has helped to boost investor confidence in the property market and stabilise prices. The districts of Seminyak, Changgu and Uluwatu have particularly benefited from this growth, attracting more expensive properties to accommodate the increasing number of foreign visitors.
As of July 2024, Bali has welcomed around 3,687,567 foreign tourists, indicating a strong recovery during the year. This means that by mid-2024, Bali has already welcomed more than 76 per cent of the total 4,817,098 foreign tourists registered in 2023, according to BPS Bali (Bali Provincial Statistics Office). If the current growth continues, 2024 is likely to significantly surpass the previous year's figures, emphasising Bali's return to a leading position among international tourist destinations.
The continued growth of Bali's property market is due to the island's sustained popularity as a tourist destination, competitive property prices compared to other popular tourist destinations and an increasing number of foreign investors interested in buying property. As a result, Bali has seen a steady increase in property prices since the pandemic.
The graph shows the evolution of the Consumer Price Index (CPI) in Denpasar, Bali from the first quarter of 2023 to the third quarter of 2024. During this period, there has been a steady increase in the index, from 102.5 points in the first quarter of 2023 to 107.64 points in the third quarter of 2024. This trend indicates a gradual increase in the cost of goods and services in Denpasar due to inflation and increased demand in Bali's property market.
As economic activity has resumed and tourism continues to recover due to the influx of foreign tourists and investors attracted by Bali's favourable offers and investment opportunities. Thus, Bali's property market is well positioned for sustained growth, opening up new investment opportunities in both commercial and residential property on the island.
Bali Property Market Outlook in 2025
Bali is seeing a steady increase in the number of international tourists in 2024, which is having a positive impact on the property and villa rental market. Tourist activity has been increasing for several months, with 544,601 tourists recorded in May, an increase of 8.23% compared to April. In July, the number of tourists totalled 625,665, an increase of 20.11% compared to June. Australian tourists make up about a quarter of all holidaymakers in Bali.
The popularity of the island as a tourist destination is expected to further boost Bali's property market. Increased tourist traffic will lead to higher demand for rental accommodation, especially in popular tourist areas such as Seminyak, Changgu and Ubud.
The growing interest of foreign investors in buying property in Bali is fuelling the market. Many are likely to be from Australia, where they are attracted by the island's warm climate and its reputation as a safe and secure place to invest in housing. This could lead to higher property prices next year, especially in the popular areas of Seminyak, Changgu and Ubud.
Beneficial Changes in Laws for Foreign Investors
In 2024, Bali's property market could be affected by changes in Indonesian laws that relax restrictions on property ownership for foreigners. This is expected to attract more foreign investors and boost the market. Also contributing to this are the government's efforts to attract foreign investment and stimulate economic growth, driven by Indonesia's success and growing middle class, which is increasing demand for residential and commercial property.
Foreigners can now purchase flats based on the land ownership of apartment buildings defined in GR 18/2021 (Hak Milik Atas Satuan Rumah Susun, HMSRS).
In addition, foreigners are allowed to buy both flats and land with HP or HGB titles. Also, foreigners can legally build, own and invest in Bali's property market through Hak Guna Bangunan, PT PMA registration and unconditional possession (HGB).
Thus, our experts believe that there is no need to wait. Now is the right time to buy a villa, flat or hotel room in Bali. If you don't want to move here, you can contract a management company to handle the business on your behalf to maximise the returns from your accommodation. Contact our property manager for a free selection of properties in Bali tailored to your finances and needs.
