Indonesia Plans 'Big Bang' Opening of Economy to Foreign Investment

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Indonesia Plans 'Big Bang' Opening of Economy to Foreign Investment

Jakarta. President Joko Widodo on Wednesday unveiled plans for a "big bang" loosening of restrictions on foreign investment in nearly 50 sectors of the economy to encourage competition.

Joko's proposal, which will ease rules in the e-commerce, retail, health care and movie industries, is the most far-reaching yet in a string of stimulus packages rolled out over the past six months to arrest a slowdown in growth.

Southeast Asia's largest economy which has been growing at its slowest pace in six years because of falling commodity prices and cooling growth in major trading partner China.

But Joko told Reuters in an interview at the presidential palace he was very optimistic that growth would rebound to 5.3 percent this year after a slide to 4.8 percent in 2015.

His trade minister, Thomas Lembong, told Reuters that the sweeping changes planned for the so-called 'Negative Investment List" signaled a greater openness to foreign investment and would partly prepare the country for free trade agreements, including eventually the Trans-Pacific Partnership (TPP).

"We are seriously considering deregulation across the board, but focusing on e-commerce, health care, and creative industry," Joko said ahead of a cabinet discussion of the proposals.

"There are 49 sub-sectors [that will be affected] so in my opinion this is the big bang."

Thomas said separately that retail was also among the sectors that would be opened up under the plan.

He said there would be an opening up to some degree in each of the 16 main sectors in the negative investment list, which include agriculture, forestry, energy, communication and transport. In some cases this would raise the limit on foreign investment stakes in companies from a minority to a majority.

The health care push which would open hospitals, clinics and laboratory services to foreign companies could bring a sea-change in a country where at present foreign medical professionals are not allowed to practice.

History of protectionism

Indonesia has a long history of protectionism, and powerful vested interests have often stood in the way of trade and investment from abroad. The last revision to the negative list was done in 2014 and was seen by many as less investor-friendly.

Joko said that, so far, he has not faced any political backlash or resistance to deregulation steps he has taken.

"For me competition is very important," he said. "If we have already launched our deregulation, the bureaucracy and the system must follow the new rules."

Joko's meteoric rise from furniture businessman to president of the world's third-largest democracy — and the first to come from outside the political or military establishment — was widely seen in 2014 as a watershed moment for Indonesia.

Supporters had predicted that the former governor of Jakarta would root out corruption, promote people based on merit rather than connections and create a vibrant economy.

Instead, as economic growth sagged last year, critics said he seemed out of his depth at times and struggling to get around politicians determined to preserve the status quo.

A cabinet reshuffle last August, which brought experienced technocrats into his team, set a new tone. Since then Joko's administration has rolled out nine stimulus packages cutting red tape, offering tax breaks and loosening regulations.

The president said there were two prongs to his growth strategy: deregulation to create competition, efficiency and better services, and infrastructure development.

His government struggled last year to disburse funds for roads, ports and power stations and many critical infrastructure projects were hamstrung by bickering ministers and red tape.

However, data released last week showed that investment growth picked up in the last quarter of the year thanks to rising public spending.

The central bank spurred growth prospects further last month by cutting interest rates for the first time in 11 months. Joko said he would like to see rates even lower but said he could not force the hand of an independent central bank.

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Vacation Home Bargains in Thailand, Bali and Malaysia

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Vacation Home Bargains in Thailand, Bali and Malaysia

Thanks to currency dips in Southeast Asia, house hunters looking for a luxury villa can find significant deals—if they’re willing to stomach some risks.

By

ANJIE ZHENG

Jan. 28, 2016 10:31 a.m. ET

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House hunters dreaming of an oceanfront villa on the white-sand beaches of Thailand or Bali can now find significant bargains, thanks to wild currency dips in Southeast Asiaover the past year. But investing in these properties can mean stomaching some risks.

In Thailand, property is now 10% to 15% less expensive than it was at the beginning of 2015, partly due to the depreciation of Thai baht, according to real-estate agency Engel & Volkers Phuket. Since May 2014, the Thai baht has tumbled 10.5% against the U.S. dollar.

Some luxury buyers are taking notice. Barry King, managing director at Prime Real Estate Phuket, says that thanks to price declines on inland villas, he sold about 20% more properties priced at $3 million or more in the past year, though he declined to disclose the number of homes he sold.

But many potential buyers are taking a wait-and-see approach. Andrew Hunter, managing director at Hunter Sotheby’s International Realty in Phuket, says inquiries about properties priced above $2 million have risen in the past year—but actual sales have been soft.

Fears about political and economic instability are likely scaring off buyers, agents say. Since the May 2014 coup that removed democratically elected Prime Minister Yingluck Shinawatra, Thailand has been under military rule. While the regime has tried to woo foreign investment, Thailand’s economy remains shaky.

Agents and analysts say that the military junta has not created significant upheaval in the daily life of Thailand, particularly on the island of Phuket. “The tourism sector has benefited from the relative political calm since the military took over,” said Krystal Tan, Asia Economist at research firm Capital Economics. Tourist visits rose 19% in 2015 compared with the year earlier, despite a mid-August bombing in Bangkok. Tourist arrivals are often a precursor to foreign buying of property, say agents.

The number of wealthy Chinese buyers in southeast Asia, already on the rise, could also pick up as the weakened yuan and volatility in the Chinese markets adds pressure on wealthy Chinese to get money out of the country, analysts say.

Last January, Dominic Powers, who is based in Hong Kong as the managing director of marketing firm Epsilon, bought a 6,000-square-foot house north of Laguna, Phuket. Mr. Powers, age 43, wanted a place that he and his wife could retire to and that his three daughters could call home.

He decided to fix the price in Hong Kong dollars, because he “was not sure in January which way the Thai baht would go.” He estimates that had he set the price in Thai baht, he would have saved the equivalent of about 700,000 Hong Kong dollars when he finally closed on the house in September, due to the baht’s plunge in the intervening months. Mr. Powers said he was not concerned about losing out due to currency fluctuations, since he was focused on finding a new home for his family.

The Indonesian island of Bali, another popular vacation home destination, saw an 11.3% drop in the Indonesian rupiah against the U.S. dollar in the past year. A slowing Indonesian economy has also dragged down the property market in the commodity-rich nation. Dominique Gallmann, CEO of Bali-based real-estate broker Exotiq Properties, says the average sales price for the agency has dropped to less than $500,000 from $750,000 in 2014. Luxury prices in South Bali dropped an average of 15% to 25% by the end of 2015, with the segment above $1 million suffering more than lower-priced properties, he added.

Martin Lack bought a classic two-story Balinese house of teak wood on 1,400 square meters of land last January, at what he said was likely “the peak of the market.” The Swiss financial adviser said he and his American wife moved to Bali full-time two years ago, partly because property in Hong Kong is so “outrageously expensive.”

Mr. Lack, a former UBS banker, pleaded guilty in 2014 to federal charges of helping Americans evade U.S. taxes by setting up Swiss bank accounts. He was sentenced to five years of probation by the Florida Southern District Court.

“After 30 years in banking, I just opened a language school in Bali: new life, new business but the same family and that’s the most important,” Mr. Lack said of his life in Bali.

The Lacks bought the house, the family’s third in Bali, because the family needed a bigger house, and he said he wasn’t prioritizing the currency exchange in his decision to purchase.

Bali’s Vacation Home Market

Prices have dropped for luxury homes on the Indonesian island of Bali. Scenes from the Seminyak area, known for its pristine beaches and tropical climate, popular with second-home buyers

Mr. Lack said if he ever decided to sell his house, it would be more difficult because Bali’s economy has been dragged down by the overall Indonesian economy. “The market is quite lackluster. Buyers are probably not as eager as before,” he said.

Authorities have stepped up security on the island after recent attacks in Jakarta, which were linked to Islamic State. Bali, which is majority Hindu rather than Muslim, is over 700 miles away from the Indonesian capital. Earlier bombings in 2002 and 2005 on the island led to steep drops in tourist arrivals.

No currency in the region performed as poorly as the Malaysian ringgit in 2015, which fell over 22.7% against the U.S. dollar. For foreign buyers, that has created some opportunities in the luxury housing market.

PropGoLuxury, an online luxury real estate platform, says there has been a 45% spike in inquiries into luxury Kuala Lumpur properties this year, with the majority coming from Singapore.

So far, however, agencies say they have not seen a spike in purchases by foreign buyers. The government, to curb speculation, raised the minimum amount for foreign purchases of property to MYR1 million ($237,316) in March and banks tightened lending restrictions, making it more difficult for buyers to obtain loans.

Foreigners may also be “spooked” by the political climate, says Singapore-based property consultant Khalil Adis. Malaysia’s anticorruption agency said Wednesday it wants to review a decision by the country’s top prosecutor clearing Prime Minister Najib Razak of wrongdoing regarding nearly $700 million transferred into Prime Minister Najib Razak’s private bank account. Mr. Najib has denied any wrongdoing.

Brokers say the slowdown in sales presents a good buying opportunity, especially as new developments are going up. The number of high-end condominiums priced above 1,200 ringgit a square foot will increase to 5,192 units in Greater Kuala Lumpur at the end of this year, estimates Savills Research, compared with 2,216 units in 2014.

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Ramada Bali Sunset Road Kuta Opens in Indonesia

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Ramada Bali Sunset Road Kuta Opens in Indonesia

Demonstrating strong and increasing interest in its portfolio of brands in South East Asia, Wyndham Hotel Group has introduced a third hotel in Bali, Ramada Bali Sunset Road Kuta, located in the heart of the vibrant Kuta district. 

Formerly the Best Western Premier Sunset Road, the 271-room property is owned by Sun Motor Group and managed by PT Wyndham Hotel Management, an Indonesian subsidiary of Wyndham Hotel Group. Ideally located close to Jalan Legian and popular Seminyak Beach, the stylish guest rooms feature contemporary décor, while suites boast separate living areas. The well-appointed facilities include a rooftop pool, gymnasium, on-site spa, meeting rooms, business centre and two distinct dining establishments.

“Bali is one of Indonesia’s most popular destinations, attracting close to four million visitors a year,” said Barry Robinson, President and Managing Director of Wyndham Hotel Group South East Asia and Pacific Rim. “With the 2013 expansion of Ngurah Rai International Airport and this year’s four-fold increase in government spending on tourism, we believe it’s a market prime for year-on-year growth.”

Wyndham Hotel Group is focused on strategic expansion throughout South East Asia as part of its larger global development strategy—especially as it relates to its Ramada brand. The company believes Ramada Bali Sunset Road will become a landmark hotel for visitors.

President and Commissioner of Sun Motor Group, Imelda Sundoro said “Ramada is a globally known brand with an enviable reputation for offering exceptional experiences in some of the world’s most sought after destinations. That strong recognition, combined with the expertise and resources of a partner like Wyndham Hotel Group, made Ramada the clear choice for us as we look to grow our hospitality developments in Indonesia.”

All Ramada hotels in Indonesia participate in Wyndham Rewards®, the simple-to-use, revolutionary loyalty program from Wyndham Hotel Group that offers members a generous points earning structure along with a flat, free-night redemption rate. To learn more and join for free, visit www.wyndhamrewards.com.

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Bali Villa Dream Closer to Reality With Baby Steps to Ease Curbs

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Bali Villa Dream Closer to Reality With Baby Steps to Ease Curbs

Buying that Bali villa may have gotten a little easier, though not easy enough.

Indonesian President Joko Widodo has signed a long-awaited rule allowing resident foreigners to purchase so-called “right-to-use” property titles for 30 years, five years longer than a previous 1996 regulation, with a possible extension of up to 50 more years. It also loosens the definition of residency, and clarifies that property may be bequeathed to relatives as long as they too have residency.

While the new rule will provide more legal certainty for foreigners, the property market remains more restricted to overseas buyers than in neighboring Singapore and Malaysia. Property firms aren’t expecting an immediate boost in demand on the resort-filled islands of Bali, Batam and Bintan.

“This won’t have a big impact on the property market, especially in the short term,” said Aleviery Akbar, Jakarta-based associate director of residential sales and leasing at Colliers International Group Inc. “It is still aimed at foreigners living here for a long time or those with a family connection.”

Opening up the property market to greater foreign investment was a campaign pledgeof Widodo, better known as Jokowi, part of a reform agenda to boost Southeast Asia’s largest economy. That has proved difficult because the constitution forbids foreigners from owning land outright, a legacy of Indonesia’s long colonization by the Dutch. Critics have also expressed fears of locals being priced out of the market with greater liberalization.

Compromise Result

In an interview in August, Land Minister Ferry Mursyidan Baldan said non-resident foreigners shouldn’t be able to buy for investment purposes. In a separate interview last September, Finance Minister Bambang Brodjonegoro struck a different tone, saying he was pushing for the law to allow non-resident investors to purchase apartments as a way of boosting the construction industry and tax revenues.

The final regulation, signed by Jokowi in late December and released publicly on Monday, appears to be a compromise. There will be further regulations explaining purchasing procedures in more detail, including a possible price floor for foreigners wishing to purchase apartments, said Lydia Suwandi, an analyst at PT RHB OSK Securities Indonesia in a report dated Jan. 13.

The main body of the regulation states that only foreigners with “permission to reside” in Indonesia may purchase land, a status normally reserved for people working in the country or those with family connections.

An explanatory note attached to the regulation states foreigners with a visitor’s permit are included, leaving open the interpretation that tourists and occasional visitors can also buy, said Handa Sulaiman, executive director of investment at Cushman & Wakefield Inc. in Jakarta.

Insecure Ownership

The main barrier to greater foreign ownership is that right-to-use is seen in Indonesia as an insecure form of land ownership when compared to freehold, meaning banks don’t generally lend for it, Sulaiman said.

“The real question is whether Bank Indonesia will allow the Indonesian banks under its charter to lend on the new title,” said Matthew Georgeson, a partner at Bali property company Elite Havens. “If they do, demand will be very, very strong.”

Surging Prices

Prime residential prices on the island of Bali, known for its surf and rice-paddy landscapes, surged 15 percent in 2014, the most among comparable destinations tracked by broker Knight Frank LLP.

Foreigners who have purchased property in Indonesia, especially on Bali where thousands own villas, have mostly used local citizens as proxies to purchase freehold land, which is legally questionable, or have structured purchases as long-term leases.

The Indonesian Real Estate Developers Association was pushing the government for no residency requirements for foreigners wishing to purchase and for clarity on banks lending to them, said Eddy Hussy, the association’s chairman. Still, he said the new law was broadly positive and further regulations were expected.

“It is better than it was before,” he said. “It is a more relaxed regime now.”

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Sanur has calm seas and beautiful beaches

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Sanur has calm seas and beautiful beaches

A gentle breeze makes its way from the South China Sea. As you relax on your veranda, the scent of flowers from the frangipani trees surrounds you and a wisp of incense floats your way from the little Canang sari offering baskets your housekeeper has carefully placed to invite balance and harmony into your home. Kites fly lazily in the brilliant blue sky, while the ocean in front of you is calm and inviting. Spotted doves coo and children laugh in the distance. These are the sights, scents and sounds of Sanur, Bali's oldest seaside resort and one of the most expat-friendly towns in Indonesia.

Bali enjoys a well-deserved reputation as one of the most beautiful tropical islands in the world. The jungle is lush, with an immense variety of ferns, palms, flowering plants and trees in a thousand shades of green. Volcanoes raise their heads above the clouds and terraced rice fields cascade into the valleys. Multi-tiered temples adorn even the smallest villages. The locals are unfailingly friendly and some of the most serene and pleasant people that you are likely to find anywhere.

Living here, you would never run out of things to do. The whole of the Bali coastline is like a picture postcard, and the ocean, which is never far away, offers world-class diving, surfing, snorkeling, parasailing and other water sports. You could dine out every day, at one of the many five-star restaurants or at a mom-and-pop eatery, where a healthy and delicious meal costs a pittance. Bars, dancing and discotheques are all convenient.

Festivals and cultural events are regular, even weekly occasions. In addition, you could fill your time golfing, climbing mountains, visiting the zoo, at art galleries, talking with artists, communing with monkeys, learning yoga or meditation or cruising around the ocean.

The small town of Sanur on the southwest side of Bali is an ideal base for a retiree on the island. Sanur is an unpretentious suburb of the larger city of Denpasar. Quiet and laidback, it feels removed from the crowds of tourists who flock to Bali for vacations and honeymoons. Pronounced "san-oor," it's so peaceful here that the town is also known by the nickname of "s-nore," or "snoreville." Even at the height of the tourist season, Sanur doesn't attract much attention.

While it has managed to stay off the tourist radar, Sanur has attracted a large population of retired foreigners, and many live here part time. Most of Sanur's resident retirees are Australian and European, including many Dutch. English is spoken everywhere, meaning that, living here, you'd have no pressing need to learn the local language.

A barrier reef runs the entire length of Sanur, protecting the coast and creating calm seas. It is possible to walk all the way out to the reef at low tide without venturing into deep water. The waves break on the reef, well off the sandy shores of the mainland. Parents with children find the beach especially welcoming, as there are seldom dangerous undertows or threatening waves. The sandy beach and paved pathway that extends the length of the Sanur coastline beckons bicyclists, strollers and sun worshipers. Restaurants and bars located along the path provide cool drinks, plenty of good food and perfect views of swaying palm trees and nearby islands.

Sanur is neither the cheapest nor the most expensive lifestyle option in Bali. It's among the most appealing, however, because it offers a high quality of life and provides value for every budget. This is a classic tropical paradise, with blue skies and starry nights, far from any smoggy metropolis.

Indeed, the air quality is better in Bali than in much of Southeast Asia. The island gets little of the smoky haze that is found elsewhere in Indonesia, Singapore and Malaysia, and the coastal breezes keep the air circulating. Water pollution and litter are bigger concerns. Although Bali has some of the finest beaches to be found anywhere in the world, the popular beaches can be trashy, and the water can be polluted. Locals and foreigners in Bali organize clean-up drives, but pollution remains an ongoing problem. Because beaches in Sanur are rarely busy, they're also cleaner.

Although foreigners are not permitted to own freehold property in Indonesia, it is legal to rent or lease apartments, houses and villas. In most cases, you'll be required to sign a lease for a minimum rental period of one or two years, and the rent is payable in full at the time you sign the agreement. It is possible to find a place with a shorter minimum stay, but the rent will be considerably higher. In general, expect to spend $1,000 to $1,500 per month to rent a comfortable place outfitted to Western standards. A total budget for retirement in Bali could be as low as $2,000 per month, but $2,500 per month is more realistic.

You might also like: http://www.mwbalirealestate.com/articles/2015/12/11/bali-beckons-as-retirement-hotspot-as-indonesia-relaxes-foreign-ownership-rules

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Rumah Murah di Bali, Mulai dari Tabanan hingga Karangasem

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Rumah Murah di Bali, Mulai dari Tabanan hingga Karangasem

DENPASAR – Pulau Bali tidak lepas dari target Real Estate Indonesia (REI) dalam hal mendirikan rumah murah bagi masyarakat berpenghasilan rendah. Rencananya ada empat wilayah yang dijadikan target.

Ketua DPD REI Bali I Gusti Made Aryawan menargetkan, akan merealisasikan 1.000 rumah untuk masyarakat berpenghasilan rendah (MBR).

Aryawan merincikan, keempat wilayah yang disasar adalah adalah Singaraja, Negara, Karangasem dan Tabanan. Hal tersebut dikarenakan harga tanahnya masih terjangkau.

“Kemungkinan nanti dibangun 200 rumah di Singaraja, 200 rumah di Negara, di Karangasem 200 tanah dan selebihnya dibangun di Tabanan,” jelasnya.

Untuk lokasi, Tabanan menjadi wilayah paling prospektif untuk dibangun perumahan untuk rakyat karena merupakan daerah pendukung Badung dan Denpasar.

“Area perumahan di Tabanan pun tidak jauh dari pusat kota, paling berkisar 15 km saja," ujar Gusti Made.

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Bali Arrivals Losing their Steam? Bali by the Numbers: Bali will Struggle to Break 4 million Foreign Visitor by Year End

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Bali Arrivals Losing their Steam? Bali by the Numbers: Bali will Struggle to Break 4 million Foreign Visitor by Year End

(12/6/2015)

October 2016 foreign arrival totals for Bali hit 369,261 – a number 8% ahead of arrivals in the same month of 2015 (341,651). 


Meanwhile year-on-year for the first 10 months of 2015, arrivals totaled 3,058,326 that was 7.57% more than the same period one year earlier.

Facing challenges on several fronts in the form of a worldwide terror caution following the November 13th ISIS attack in Paris and volcanic uncertainty as Mount Barujari continues to erupt on nearby Lombok Island, Bali will have to struggle to break the 4 million mark for foreign tourist arrivals for all of 2015.

The effect of cancelled flights to and from Australia due to volcanic activity is demonstrated in Australian arrivals for the month of October 2015 with 93,124 visitors – a number just 2.5% more than October 2014 (90,828). Australian arrivals can no longer be said to be “booming” to Bali with a year-on-year performance that is largely flat, increasing only 1%.


Australian arrivals are also suffering due to lingering resentment over what is seen as selective discrimination against Aussie travelers who have been denied, some say petulantly so, visa free access to Indonesia. There is also a horrendous misfire by the immigration chief at the Bali airport who announced Australians would be limited to two purchased visas on arrival in any twelve month period. That pronouncement, abruptly withdrawn ten days after it was announced, continues to make the rounds in Australia dissuading frequent visitors to Bali from making a return trip. 

More flights connecting Bali and Mainland China have boosted Chinese arrivals to Bali that have increased 4.2% in October when compared to October 2014. For the first ten months of 2015, Chinese arrivals are up 20.53%.

Japanese arrivals have improved 9.02% in 2015, but still fall far short of totals achieved less than 10 years ago when they were the greatest source of Bali’s inbound visitors.

Both Malaysian and Singaporean arrivals to Bali are down dramatically year on year, declining 13.73% and 18.53%, respectively. 

Even more dismal are arrivals from Russia that have declined 32.39%. The Russian holiday market that declined by half in January 2014, can be expected to decline further in January 2016.

Continuing to turn in strong performances year-on-year during the first ten months of 2015 are the U.K. (+28.82%), USA (+18.54%), Germany (+14.65%), The Netherlands (+15.75%), India (+27.37%), New Zealand (+15.76%), Canada (+20.39%) and the Swiss (+30.37%).

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Bali beckons as retirement hotspot as Indonesia relaxes foreign ownership rules

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Bali beckons as retirement hotspot as Indonesia relaxes foreign ownership rules

Forget Queensland's Sunshine Coast or the NSW Central Coast, Bali could become the next retirement hotspot for cashed-up Australians.

That comes as Jakarta relaxes rules allowing foreigners to buy luxury apartments in Indonesia coming into effect later this year.

But, it won't be a free-for-all. The  Indonesian government plans to set conditions, including size restrictions, and property that stands on its own block of land won't be included, meaning palm tree-shaded Balinese villas won't be included.

Instead the government wants to steer foreign buyers into apartments in new high-rise projects as part of plans to revive growth in South East Asia's biggest economy.

Bali remains the nation's favourite holiday destination despite a recent tourism backlash following the executions of drug smugglers Andrew Chan and Myuran Sukumaran. Many Australians also hold ambitions of buying a holiday pad on the resort island.

Ray White chairman Brian White described the news as "wonderful" and tipped many Australians to take up the opportunity to own a small piece of island paradise.

"As people get to retirement age, they want to know where they can get the best bang for their buck, not just in terms of property, but in terms of lifestyle and cost of living. Asian countries score highly.

"Lot of Australians have moved to Thailand and Malaysia. The number of Australians visiting our offices in Bali suggest similar appetite for real estate, but the current ownership structure could not be more unattractive," he said.

Under current rules only Indonesians can own freehold property. Foreigners can get around these restrictions by using local citizens as proxies or by structuring the purchase as a long-term lease. 

Co-ordinating Economic Minister Sofyan Djalil said the regulations would allow foreigners to own an apartment with a value of more than Rp 5 billion ($509,000).

"If people from developed nations want to retire here or spend their winters here, then that will create jobs and boost spending power," Djalil said. "It will make the property market live again."

The relaxation of restrictions will also benefit developers with exposure to high-rise projects.

with Bloomberg
 

See Also: http://www.mwbalirealestate.com/articles/2015/11/13/new-zealand-to-play-second-fiddle-to-bali-and-china-in-the-australian-tourism-race-figures-reveal

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Economic of Bali is Predicted Growing 7.03%

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Economic of Bali is Predicted Growing 7.03%

DENPASAR

Bali economy in 2016 is predicted to grow in the range of 6.03% -7.03% as the stronger of consumption, improving investment climate and export performance.

According to Bank Indonesia Representative Office of Bali, the improvement in consumption along with the improvement in consumer expectations in 2016 and an increase in province budget, regency / city as well as infrastructure development plan that can stimulate economy

“Infrastructure is up, investment will also rise. In addition, the results of our survey, exporter is optimisms with an estimated increase in global economy in the next year that will encourage the export of Bali,” said Dewi Setyowati, Head of Representative BI Bali, on Friday (27/11/2015).

According to her, Bali tourism sector will get benefit from the world tourism sector that still show an increasing trend. Based on World Travel and Tourism Council (WTTC), the tourism sector is expected to grow 4%, higher than the financial sector, transportation and manufacturing.

United Nations World Trade Organization (UNWTO) is also projecting an increase in the number of tourists doubled or 2 billion in the period from 2013 to 2035. Moreover, government policies stipulate 90 countries visa-free visit to Indonesia in October 2015 and is planned to be 110 countries at the end of 2015 will be an opportunity for Bali.

However, although it will still grow higher than the national economy, but the growth is still lower than the target medium-term development plan (RPJMD) Bali that range from 6.83% – 7.56%. Therefore, said Dewi, the synergy between the government and all stakeholders become an important point

She revealed that there are still some aspects that need to be improved by Bali to reach high growth of economies. Identification of appropriate tourism development priorities, ongoing efforts to increase infrastructure, the calibration of fiscal incentives, increased international promotion, and law enforcement government regulations related to the development of more environmentally-friendly tourism are some things that should be a concern.

In addition, diversification of export markets and products become the main point in promoting export performance. Weakening global economy will have an impact on reduced demand for products of export of this region with a growth of -18.18% in the third quarter of 2015.

In fact, Bali is also known by the export of goods, one of which is dominated by artistic and high culturecraft, the share reached 38.12%. Another thing to note is to preserve and appreciate the authenticity of the results of the product as well as artists in the form of Intellectual Property Rights (IPR) to foster the development of sustainable product.

Observers of Economics, University of Education (Undiknas) Bali, Ida Bagus Raka Suardhana emphasized that tourism will still be the main pillar of economy. However, he considered the main dignity of tourism, which is culture is in danger.

Therefore, he suggested that tourism practitioners to concern on culture in Bali for the sustainability of tourism that supports the economy. The local government also suggested to give attention to the threat of congestion that could threaten tourism.

He suggested the government to raise taxes on motor vehicles in order to suppress the ownership of vehicle. Currently, due to higher revenues of Balinese people, the ability to buy vehicles is also rising.

“Indeed, there is a progressive tax, but it is useless. The next problem is consumptive behavior of society,” he explained.

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House Hunting in ... Bali

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House Hunting in ... Bali

A THREE-BEDROOM TRADITIONAL-STYLE HOME IN UBUD

$435,000

This house, consisting of two refurbished traditional Javanese structures known as joglos, is in Ubud, the inland city of temples and jungle-covered hills on Bali. Ubud is where the author Elizabeth Gilbert found love in her 2006 book “Eat, Pray, Love,” which helped raise international interest in property there.

Joglos are simple, open-air, wood-beam buildings found on the island of Java, hundreds of which have been dismantled and rebuilt as villas on Bali. The wood for this house is more than 120 years old and was originally used for a train station on Java, according to Jared Collins, a marketing consultant with Ubud Homes, which is listing the property.

The two joglos were rebuilt into this 3,300-square-foot home in 2010. Like most joglos, they are constructed around four wood pillars that form a tall central core, which draws hot air from the small rooms radiating from the center.

 

The house, with three bedrooms and four bathrooms, is on 0.22 acres about five and a half miles from the center of town and about 800 feet off a road filled with buzzing motorbikes and small trucks. The land is surrounded by a palm tree plantation and fields of alang-alang, the tall grass used to make thatched roofs.

The property is entered through a teak door, which leads to a wide pathway. The buildings are surrounded by gardens with traditional Indonesian figurines, and there is a large barbecue pedestal near a rectangular swimming pool, which separates the two joglos.

The main building features a large open living area, a dining area with a table for eight, two bedrooms and a Western-style kitchen with modern appliances. The floors are teak; the hardwood furniture is included in the price. Each bedroom has its own bathroom with a stone bathtub and separate shower. and a stone sink. There is air-conditioning in the bedrooms, but the living areas have only fans, which is common for modern villas on Bali.

The second building serves as the master bedroom suite, with floor-to-ceiling windows facing the pool. The king-size bed is on a platform in the center, surrounded by a sitting area, an office, a walk-in closet and a bathroom.

A third structure on the property can serve as staff quarters, including a kitchen and laundry room. The property also has a license to operate as a bed-and-breakfast, Mr. Collins says.

MARKET OVERVIEW

Luxury home prices on Bali rose by 15 percent in 2014, making it the third-fastest growing upscale second-home market in the world, behind New York and Aspen, Colo., and tied with Istanbul, according to data tracked by the real estate firm Knight Frank. International interest is driving the market, spurred by the relatively low prices and widespread media attention, including exposure from the book “Eat, Pray, Love” and the 2010 movie version, property agents say.

In Ubud, foreigners account for as much as 50 percent of transactions, said Terje H. Nilsen, a principal in the Ray White Paradise Property Group, a Bali-based real estate company. “It’s really taking off,” he said.

With no multiple listing service and little shared sales data, it is difficult to track real values, agents say. Prices for choice parcels near the center of Ubud have increased from 300 percent to 400 percent in five years, with some properties fetching as much as $1,500 a square meter, or about $140 a square foot, Mr. Collins said.

“The market is without a doubt overheated,” he said. “Prices are changing every three months.” Despite a construction boom, there is still a limited supply of homes that meet the standards of Western buyers, agents say.

Joglos have been particularly popular with international buyers. “They are still comparatively cheap to acquire and build out, as opposed to permanent concrete structures,” Mr. Collins said.

But prices for joglos have skyrocketed in recent years, and the Java government has also moved to limit the export of the structures.

“Prices are high, because many have already been bought and brought to Bali,” said Alejandra Cisneros, a designer based in Bali who has helped restore joglos. “And the Javanese are now not as willing to part with those joglos that are left.”

WHO BUYS IN UBUD

Far removed from the Bali beach-party scene, Ubud is famous as a haven for hippies, spiritualists and healers, who flock to the city seeking a healthy lifestyle as well as enlightenment. The streets are lined with meditation centers, yoga centers and organic restaurants.

Buyers typically range from bargain-hunting backpackers to the very wealthy, who seek the large villas that dot the hills and valleys around the city, Mr. Nilsen said. Australians are among the most active buyers, but Chinese and Korean buyers are becoming increasingly common, he said, and Indonesians have also become more active in recent years.

Traditionally, international buyers have bought homes in Ubud to start a new life on the island or as a second home. But in recent years, many of the foreign buyers have been focused on properties that can be used as short-term rentals for tourists.

“I probably meet a new person every other day who tells me he or she is moving to Bali and would like to build a little something with perhaps a rental property attached,” Ms. Cisneros said.

BUYING BASICS

Foreigners cannot directly own freehold land on Bali. For many years, international buyers commonly purchased land through “nominees,” putting the title in the name of an Indonesian citizen or company. But recent comments by a government official signaled a move to crack down on the nominee deals, which have never been endorsed by law.

Nominee deals “are not allowed,” said Devy Susanti, who works as a private Bali land deal officer, assisting buyers and sellers. She strongly urges international buyers to avoid the nominee process.

But there are alternatives. Property experts advise foreigners to use one of two systems for buying control of a property. Through one process, the land is transferred to government control and the buyer is given what is known as Hak Pakai, the right to use the property for up to 70 years. Another method is to arrange a long-term lease directly with the owner of the property.

“Long-term leasing is the best and safest way for foreigners to invest here in Bali at this time,” Mr. Collins said.

Whatever the course, experts warn the process can be complex, with many potential hazards. A lawyer and notary can research the land certificate and other official documentation for the property.

“The land certificate is key,” Ms. Susanti said.

It is also essential to research the ownership of the property, amid the complicated lineage of Balinese families. “You need to make sure you are dealing with the right owner,” Ms. Susanti said. “Sometimes you are dealing with a member of the family who doesn’t have the right to lease it.”

WEBSITES

Bali Tourism Board: bali-tourism-board.org

Ubud tourism site: indonesia-tourism.com

LANGUAGES AND CURRENCIES

Indonesian and Balinese, but English is common; Indonesian Rupiah (Rp) (1 Rupiah = $0.000077)

TAXES AND FEES

Indonesia typically charges a 10 percent tax on freehold land transactions, based on the value of the land, which is usually split between the buyer and the seller. A foreigner acquiring this property through a long-term lease would likely pay a 5 percent buyer’s tax and a 1 percent notary fee, Mr. Collins said.

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Investasi ke Bali Hingga September Capai Rp 22,9 Triliun

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Investasi ke Bali Hingga September Capai Rp 22,9 Triliun

TEMPO.COJakarta - Realisasi investasi modal asing dan dalam negeri ke Bali pada periode Januari-September 2015 meroket hingga 689 persen menjadi Rp22,9 triliun, dari periode sama tahun lalu hanya Rp2,9 triliun.

Dari total investasi tersebut, penanaman modal asing (PMA) mencapai US$454,8 juta, dengan menyerap tenaga kerja asing 93 orang, dan 3.626 orang lokal di 529 proyek. Adapun penanaman modal dalam negeri (PMDN) Rp17,6 triliun meliputi 22.846 proyek dan menyerap sebanyak 5.084 orang.

Pemberlakuan Masyarakat Ekonomi Asean (MEA) mulai akhir tahun ini diperkirakan menyebabkan investor bersemangat merealisasikan proyeknya agar dapat segera beroperasi.

"Mungkin pengusaha mau menangkap peluang itu. Soalnya, ada banyak negara dapat bebas visa dan kunjungan wisatawan ditargetkan naik, pasarnya menjanjikan," ujar Ida Bagus Parwata,‎ Kepala Badan Penanaman Modal dan Perizinan Daerah (BPMPD), Rabu (2 Desember 2015).

Parwata menegaskan realisasi hingga akhir September di luar dugaan, karena target Bali sampai akhir tahun hanya sekitar Rp11 triliun. Dia mengungkapkan sektor tersier masih menjadi tujuan investasi terfavorit dengan nilai investasi Rp22,8 triliun, sedangkan sektor primer Rp21,7 miliar, dan sekunder Rp165,3 miliar.

Sektor tersier yang paling diminati adalah bidang perdagangan dan reparasi mencapai Rp16 triliun terdiri dari 4.124 proyek, sedangkan hotel dan restoran sekitar Rp5 triliun meliputi 660 proyek.‎

Lokasi yang banyak menjadi tujuan investasi modal asing dan dalam negeri adalah kota Denpasar senilai Rp15,1 triliun, dan Kabupaten Badung Rp5,2 triliun, sisanya tersebar di 7 kabupaten lain.

Menariknya, kata dia, realisasi investasi asing, khususnya dari negara Singapura, Malaysia, dan British Virgin Island ke Bali, pada periode triwulan III/2015 mengalami peningkatan tajam.

Penanaman modal asing (PMA) dari Malaysia tercatat berkontribusi terbanyak, mencapai US$‎121,2 juta atau meroket 13.369% jika dibandingkan dengan akhir 2014 senilai US$900.000. Jumlah tersebut hanya realisasi dari 3 proyek.

PMA Singapura mencapai US$104,5 juta, meningkat 203% dibandingkan dengan akhir tahun lalu US$34,5 juta. Jumlah proyek yang direalisasikan sebanyak 22 lokasi. Sementara PMA dari British Virgin Island mencapai US$74,2 juta, melonjak 1.213% dari akhir Desember tahun lalu US$5,4 juta. Dengan jumlah proyek yang direalisasikan sebanyak 5 lokasi.

Astawa memprediksi hingga akhir tahun realisasi investasi ke Pulau Dewata akan terus meningkat. Dia memperkirakan total investasi asing dan dalam negeri ke pulau ini bisa menembus Rp24 triliun.

Dia melanjutkan pada tahun depan diperkirakan investasi ke Bali akan terus meningkat seiring langkah DPRD Bali menggodok ranperda insentif bagi investor yang berinvestasi di luar Bali Selatan.

Ditegaskan, kebijakan itu akan membuat investor mendapatkan bantuan dan kemudahan sehingga tertarik berinvestasi.

See also: http://www.mwbalirealestate.com/articles/2015/12/4/investment-up-689-over-january-september-period

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Investment up 689% over January-September period

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Investment up 689% over January-September period

Authorities have reported a 689% increase in foreign investment and domestic capital in Bali’s provincial economy over the 9-month period between January to September of this year.

Compared to the same period in 2014, which saw a total of Rp. 2.9 trillion of investment funds injected into the economy, figures have spiked up to Rp. 22.9 trillion.

According to the Head of Investment and Regional Licensing (BPMPD), Ida Bagus Parwata, funds have increased as investors are anticipating the commencement of the ASEAN Economic Community (AEC) agreement by the end of the year. The AEC is set to establish a common market amongst all ASEAN member nations liberalizing labour and capital flows.

“Businessmen want to seize opportunities. There are many countries which can make use of our visa free services, which has led to tourist number increases, the market is promising,” said Parwata on Wednesday 2 December.

It is understood the Rp. 22.9 trillion figure comes as a surprise as economic analysts targeted Rp. 11 trillion as the ballpark at the end of 2014.

Parwata revealed that the tertiary (service) sector is still the favorite investment area with an investment of Rp22,8 trillion, while the primary sector came in at Rp21,7 billion, and secondary Rp165,3 billion.

The service sector is the most desirable area of trade and investment reached Rp16 trillion, comprising of 4,124 projects, while hotels and restaurants amounted to Rp5 trillion, covering 660 projects.

The most heavily invested regency was Badung with investors directing Rp. 15.1 trillion, over 65% of funds.

Interestingly, he said, foreign investment to Bali, particularly from the countries of Singapore, Malaysia, and the British Virgin Islands, in the third quarter / 2015 has increased sharply.

Source:
Tempo: Investasi ke Bali hingga September capai Rp. 22,9 triliun

Related Articles. See also: http://www.mwbalirealestate.com/articles/2015/11/12/why-you-should-be-investing-in-bali-real-estate

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Villa rentals in Bali on the decline

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Villa rentals in Bali on the decline

Property analysts have estimated that private rented villas in Bali will continue to see low occupancy levels after a slight decrease of around 9 percent, during the first half of this year compared to last year, the Jakarta Post reported.

The level of occupancy was affected by the increasing supply of accommodation and the decreasing length of time guests stay on the island, Hasan Pamudji, senior research manager Knight Frank, explained in the company’sBali Property Outlook.

“With the increasingly fierce competition, the rising supply of new villas, as well as the lowering volume of bookings for rented villas, the rental price is predicted to drop amid a price war, especially for three- and four-bedroom villas,” Pamudji said.

In line with the slowing demand for four-bedroom villas, rental prices have also decreased by eight percent during the low season, and up to 11 percent during the peak season, the newspaper reported.

The economic crisis in Europe has contributed to the slowing demand. August, which is usually a peak month for European tourists, saw demand decrease significantly. However, June, which is commonly a low month for rented villas, eventually turned out well due to the increasing demand from Australian and Asian tourists.

According to the results of Bali Property Outlook, the rental price of one-bedroom private villas grew by a significant 21 percent during the low season.

“Developers and buyers are mostly interested in buying one-bedroom villas, because there is still a high rental demand for this type of villa. Many tourists prefer villas with fewer bedrooms,” Pamudji said.

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Indonesian Tourism Minister Predicts Tourism to Become Nation's Top Foreign Exchange Earner

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Indonesian Tourism Minister Predicts Tourism to Become Nation's Top Foreign Exchange Earner

(11/29/2015)

Indonesia's Minister of Tourism, Arief Yahya, predicted in Jakarta on Tuesday, November 24. 2015, that tourism is destined to become the Nation's top foreign exchange earner.

Tourism currently ranks 4th in terms of foreign exchange earnings after mineral and gas resources, coal and palm oil production. 

Yahya portends that tourism as a renewable resource will eventually supplant its competitors that will decline over time. Meanwhile, he sees tourism growing by leaps and bounds, contributing Rp. 280 trillion to the economy in five years time - an amount equal to 8% of the Gross National Product and providing employment to 13 million Indonesian workers. 

"President Jokowi has already set the target that tourism must double within 5 years. If this year sees us welcoming 10 million foreign tourists, then by 2019 there will be 20 million visitors producing US$22 billion in foreign exchange," explained Yahya.

The Indonesian Minister of Tourism said 5 elements must be synergized to reach National tourism targets, namely: academia, business, government, the community and the media. By coordinating these 5 elements the Minister is confident Indonesia will welcome 20 million tourists by the end of 2019 and support 275 million domestic tourism journeys each year. 

Supremely confident, Yahya boasted, "It is not impossible that the target of 20 million foreign tourists and 275 million domestic journeys will be easily achieved."

To make this happen Yahya said that a certain strengthening of a shared understanding and common vision is needed to created a coordinated and sustainable tourism industry.

As reported by The Bali Post, the government is concentrating on developing 10 key strategic tourism destinations (KSPN) in Indonesia: Borobudur (Central Java), Mandalika (Lombok, Nusa Tenggara Barat), Labuhan Bajo (NTT), Bromo-Tengger Semeru (East Java), the Thousand Islands (DKI Jakarta), Toba (North Sumatra), Wakatobi (Southeast Sulawesi), Tanjung Lesung (Banten), Morotai (North Maluku) and Tanjung Kelayanh (Bangka-Belitung).

 

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Bali Beach Pads Jumping 15% Put Indonesia Builder Bonds in Front

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Bali Beach Pads Jumping 15% Put Indonesia Builder Bonds in Front

What could be nicer than your own beachside villa in Bali boasting a plunge pool, ocean views and personal chauffeur? For some, owning the debt that built it.

Dollar-denominated bonds of Indonesian developers, including those building luxury projects on its main resort island, are outperforming. Property firms have issued almost half of ex-government dollar notes outstanding in the nation as they bypass local lending curbs, Bloomberg-compiled data show. Their debt has returned an average 5.4 percent this year, while paper in other industries has lost 0.3 percent.

Bali’s surf, volcanic-brick architecture and rice-paddy landscapes are high on wish lists of millionaires seeking beachfront havens, with top home prices rising 15 percent last year. The island is a bright spot in an economy growing at the slowest pace since 2009, as corporate governance is clouded by more than $3 billion of defaults on U.S. currency notes in the past seven years.

“As a foreigner, if you want to buy for capital appreciation, fine, but do remember Indonesia is a high-risk market. Regulations and policy keep changing,” said Jacintha Poh, an analyst at Moody’s Investors Service in Singapore. “The residential price index there is a straight line up.”

Hot Market

House values across Indonesia’s 14 biggest cities have surged 37 percent in the past five years. Moody’s and Standard & Poor’s estimate at least 15 million new homes are needed to meet the demands of a growing population, which reached 252.8 million at the end of 2014.

To finance the market, developers are issuing more bonds in U.S. dollars, given the lower interest rates and bigger amounts available offshore, according to Fitch Ratings Ltd. At home, meanwhile, real estate companies’ funding is curbed by laws barring the acquisition of land using bank loans.

“Developers can’t borrow from banks for land expansion and the local capital market is still relatively small,” said Jakarta-based Erlin Salim, an associate director at Fitch. “There’s an increasing need for developers to find long-term funding to replenish land bank inventory as housing demand increases.”

High offshore costs aren’t dissuading them. Gross profit margins for Indonesian developers can be as high as 90 percent, according to Moody’s. That means even coupons ranging from 6 percent to 11 percent on top of the currency mismatch aren’t enough to deter them from dollar debt.

Cheaper Too

U.S. rates can also be cheaper than local onshore debt. Developer PT Lippo Karawaci, which operates a mall in Bali and is planning a hotel there, paid 11.5 percent for a 50 billion rupiah ($3.7 million) 11-year loan agreed in 2008. Four years later, it issued a seven-year dollar debenture more than 100 times that amount costing 6.125 percent.

PT Modernland Realty, which builds luxury townships in Indonesia, has the best performing dollar bonds among developers this year as the government looks to ease restrictions on foreign ownership of local property. The company’s two securities have returned 7 percent and 8 percent.

As other traditional high-yield issuers from Indonesia are forced to restructure or stop investing amid a slowing economy, home builders are filling the gap.

“The number of property issuers has increased in recent years,” said Clement Chong, a Singapore-based senior credit analyst at NN Investment Partners, which managed about 203 billion euros ($223 billion) as of March 31. “At the same time, the number of non-property issuers has not increased that much for a number of reasons.”

Four Defaults

At least four Indonesian companies have defaulted on dollar debt in the past three years, including a shipper, two commodity-related firms and a mobile phone operator. But as the prices of basic inputs from coal to palm oil drop, developers seem to be weathering the downturn.

“The sector is still stable,” Singapore-based S&P analyst Kah Ling Chan said. “They’ve been hitting their sales targets over the past few years, unless when the regulation is uncertain. The problem with the Indonesian government is that when they roll out regulation, they are not very clear.”

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Has the Bali Property Boom Gone Bust? Developers Say Bali Property Sales Down 75% in 2015

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Has the Bali Property Boom Gone Bust? Developers Say Bali Property Sales Down 75% in 2015

 

Bisnis Bali, in a page-one article titled  "Bali’s Property Market has Collapsed”, reports that tight money and government surveillance of property transactions are being blamed for the current weak property market in Bali.
 
The arrest by Indonesia’s anti-corruption agency (KPK) of property investors and subsequent charges of money laundering have tempered appetites for investment in the property sector.
 
The former chairman of the Bali chapter of Real Estate Indonesia (REI). I Dewa Putu Selawa, confirms that property investment in private residences, development sites and villas has been declined substantially over the past year. He said transactions in excess of Rp. 500 million (US$37,500) have become lethargic. Meanwhile, properties with price tags in excess of Rp. 1 billion (US$75,000) have become very difficult to sell.
 
Selawa, is a director of PT Sepa Karya Buana, a development firm, says the circulation of cash in Bali has declined dramatically since early 2015. This is evidenced by the arrest of high profile figures on charges of money laundering. The former REI official says Bali’s property market is now “stagnant” with only very large-scale projects able to weather the current decline. He said property companies are recording sales in 2015 that are only 25% of business levels experienced just one year before.
 
In addition to a smaller amount of money in circulations, new regulations requiring a down payment covering a minimum of 30% of the purchase price of a property and a general reluctance to invest in an uncertain property market have added to the current stagnation in Bali property sales.
 
Another developer, I Nengah Mertha, complained that since the end of 2014 it has been problematic to acquire land for development projects in strategic areas of Bali. Mertha told Bisnis Bali that he is currently without any ongoing projects.
 
The rapid rise in property prices has put land in strategic areas, such as Badung and Denpasar, out of the reach of developers. Land that once sold for Rp. 100 million (US$$7,500) per are (100 square meters) now sells for Rp. 400 million an are.
 
A weak property market and declining consumer demand has left Bali’s property market in the doldrums. Weak demand continues to fuel current uncertainty as potential future property owners are waiting in the wings for prices to fall before cosidering Bali property as a worthwhile investment.

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Tourism in Indonesia: Strong Growth Visitor Arrivals on Bali

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Tourism in Indonesia: Strong Growth Visitor Arrivals on Bali

A total of 1,555,609 foreign tourists have visited the island of Bali, the most popular tourist destination in Indonesia, in the first five months of 2015, an 11.3 percentage point growth from the same period last year. Given that the number of foreign tourists usually peaks in the period June-September it is most likely that the government’s target of welcoming 4 million foreign tourists on Bali in 2015 will be achieved, or exceeded. Most tourists that visit Bali originate from Australia, China and Japan.

The significant growth of tourism numbers in the first five months also implies that there has been limited negative influence caused by the Indonesian government’s reluctance to block several executions. In January 2015, despite fierce international resistance, Indonesia allowed the execution of five foreigners (from Brazil, the Netherlands, Malawi, Nigeria, and Vietnam) and one Indonesian citizen who were all found guilty of drug trafficking. These executions temporarily led to diplomatic tensions as the Netherlands and Brazil recalled their ambassadors. Then, in April 2015, seven more foreigners (from Australia, Nigeria and Brazil) and one Indonesian citizen were executed for smuggling or distributing drugs in Indonesia. This led to troubled diplomatic relations between Australia and Indonesia. Meanwhile, earlier this week, a Frenchman (drug trafficker) lost its appeal against his death sentence.

To boost development of the tourism industry on Bali, the government and other stakeholders are eager to pay more attention to the island, including the provision of accommodation (with high quality facilities), infrastructure development as well as tackling safety issues and enhancing the quality of local human resources. For example, the Indonesian government is planning to construct a two-runway international airport at Singaraja (North Bali) as well as a toll road from the capital city of Denpasar to Gilimanuk (West Bali).

 

Bali, which has been a popular destination for foreigners since the 1930s, is one of the islands that receives special attention from the government in order to achieve the government’s middle-term target of attracting about 20 million foreign tourists by 2020 in the whole archipelago.

The marketing budget of the Indonesian government was raised fourfold to IDR 1 trillion (approximately USD $75 million) for 2015. This budget will be primarily used to promote Bali, Jakarta, Bintan and several islands of Batam (near Singapore) to the international audience. Together these areas account for about 90 percent of Indonesia’s revenue from foreign tourists.

The government is eager to compete with regional neighbours Malaysia, Singapore and Thailand. Although Indonesia is the largest country in the Southeast Asian region and contains ample attractions for tourists, it lags behind in terms of attracting foreign tourists, welcoming less than half the foreign tourists than its regional peers. In 2014 Indonesia welcomed 9.4 million foreign tourists, much less compared with Thailand (24.8 million) and Malaysia (27.4 million).

One of the strategies of the Indonesian government to attract more tourists is the granting of visa-free entrance to citizens of 30 countries for a holiday with the maximum duration of 30 days. According to Indonesian state news agency Antara this new policy comes into effect on 1 July 2015. By waiving visa requirement for these 30 countries, the government targets to increase the number of foreign tourist arrivals by around 5 percent to 10 million in 2015.

These 30 countries are Austria, Bahrain, Belgium, Britain, Canada, China, the Czech Republic, Denmark, Finland, France, Germany, Hungary, Italy, Japan, Kuwait, Mexico, the Netherlands, New Zealand, Norway, Oman, Poland, Qatar, Russia, South Africa, South Korea, Spain, Sweden, Switzerland, the United Arab Emirate and the United States. Fifteen other countries, mostly located in Southeast Asia, were already exempted from tourist visa requirements.

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Sumba, the Indonesian island that's turning heads away from Bali

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Sumba, the Indonesian island that's turning heads away from Bali

Four flights had taken their toll. My eyes scrunched tightly in order to focus on the scene around me. Huge coconut palms rose up from luxuriant vegetation; papaya trees bowed heavy with fruit. An hour's flight from Bali had deposited me 250 miles south-east on Sumba, an island twice its size, but with just 15 per cent of its population. From the car window I could see men with machetes hanging from their waists, depositing leaves in a pile on the roadside. 

As recently as the 1960s, head-hunting was practised in Sumba and today this little-visited Indonesian island still offers glimpses of long-held traditions. Animals are both worshipped and slaughtered as part of routine rituals, while hand-carved spears and swords feature in annual, often bloody, mock battles between villages – recreating ferocious historical disputes.

“What's the significance of the stone boxes outside all the houses?” I asked my driver, having counted dozens. “We sacrifice animals on top of them,” he told me. “And inside, we bury our relatives.” Protestant and Marapu religions are practised here, resulting in a blend of indigenous and colonial theism – far removed from the frequent and flamboyant Hindu depictions of deities found on Bali or the Islamic practices throughout the rest of the Indonesian archipelago. Sumba is a long way from Bali's flashing neon, happy hour cocktails, tightly packed boutiques and resorts. Traditionally attracting just a few adventurous backpackers, it is still well off the tourist path.

Nihiwatu beach (Tania Araujo)

In recent years though, things have started to change, with the creation of an exclusive bolthole on the south-west shore. Set in 570 acres of forested coastline, Nihiwatu has made a quiet but assured name for itself, first as a surf pilgrimage site then, more recently, as a discreetly luxurious retreat. This place marries man-made luxury with a sublime natural setting and keeps a keen eye on preserving Sumbanese heritage while making sure the wi-fi is reliable and the wine cellar is well stocked.

A small band of surfers first got wind of Sumba's legendary breaks in the late 1980s and settled on the site that would become known as Nihiwatu with a few tents. Founded as a modest surf retreat by American and German surfers Claude and Petra Graves, Nihi, as locals and returning guests affectionately know it, has become a huge, but by no means characterless tropical hangout. Its latest revamp began in 2012 when the American billionaire Chris Burch and South African hotelier James McBride acquired the site with the aim of expanding it into one of the most exclusive resorts on the planet. Almost four years later, Nihiwatu has evolved into a destination that doesn't just cater for surfers. Guests are encouraged to enjoy spa treatments, horse rides or yoga sessions, while personal butlers do all they can to meet every craving or desire. 

Thirty spacious and secluded villas, each crowned with traditional alang-alang grass roofs, rise from the jungle, while private pools and skilfully positioned outdoor showers make cooling off in the tropical heat both liberating and indulgent. Massages are enjoyed from a stilted shack, tiptoeing into the ocean as gentle waves splash against its bamboo shins and jasmine oil is worked liberally into your skin. The experience is all the more impressive thanks to angled, inverted mirrors on the floor that provide guests with a view of the sandy beach. It's this attention to detail that sets Nihiwatu apart – that, and the overwhelming affection for surfing.

Sumba's superior waves haven't been neglected since the resort's upgrade. Indeed, staff guard the surrounding breakwater aboard boats. In Bali, dozens of surfers vie for a spot in the water, but at Nihiwatu, numbers are limited to just 10 at a time. 

“As you can see, we have no televisions in the villas,” butler Bojes pointed out, as I took respite from the afternoon heat in the cool shade of my garden. “But what we do have is a selection of binoculars. You can watch the surfers on the break,” he said, with a grin, hinting at my apprehensive plan to have a go myself. “Perhaps I'll leave it for just one more day,” I responded with some trepidation.

Massages became perfect bookends to indulgent brunches, lunches and tea, while excursions to waterfalls, markets and horse races could be either snubbed or embraced, depending on one's mood. On one afternoon when I ventured beyond the resort, I watched teenage boys career around a natural amphitheatre on powerful thoroughbreds. Bareback horse-racing pulls in huge crowds on Sumba and, as I mingled within the vociferous crowd at the island's tropical equivalent of the Grand National, I was swept up on a tide of excitement. The winning jockey was only 12 but he took home the grand prize of a scooter and a plough.

Back at Nihiwatu, I staggered in from an hour of afternoon yoga to be rewarded with a plate of sashimi made from a wahoo fish that had been swimming just hours before, daubed with fiery wasabi which was almost only a littler spicier than the cocktail that followed. “This is the best Dark and Stormy you'll get anywhere in the world,” said Leo, an English barman living the Sumbanese dream, as he placed the glass on the bar and dropped in a straw crafted from sugar cane. “I spent all afternoon reducing this syrup from our own ginger and the limes are from just down the road.” 

Hibiscus, bougainvillea and frangipani also garland the resort, providing aromatic accompaniment to a stroll around gardens of basil, chilli, cucumbers, aubergines and tomatoes. The russet seed pods of overhanging tamarind trees clink together in the gentle breeze, as lizards dash in and out of view and eucalyptus trees sway overhead. As seductive as the setting is, it is impossible not to be drawn to the legendary breaks offshore, the most celebrated of which is Occy's Left – named after Australian pro surfer Mark “Occy” Occhilupo.

Because the wave has a chance to build up power and speed, uninterrupted for miles, it is reputed to be one of the best left-hand breaks in the world. But, as one of the world's worst right-handed surfers, I would need a lot of luck to succeed. Conveniently though, the wave breaks just a short paddling distance from the hotel bar, The Boat House – so, I knew a cold beer was nearby, irrespective of my performance. 

“This is a very special place,” Californian surf coach, Terry Simms told me as we gazed back at the tropical shore. “This wave is at the heart of what makes it so special. The force of the Indian Ocean culminates here.”

With a thick wall of water approaching, I tried to remember everything I had been taught about surfing in the past and, as I jumped to my feet, I let out an instinctive squeal of delight. I had fluked my first Sumbanese wave. For 10 magical seconds I careered towards the shore, before flopping off and into the sandy shallows. Board in hand, I stumbled back up the beach to collect my prize – that icy beer waiting tantalisingly on the bar.

Getting there

Simon Parker travelled with Royal Brunei Airlines (020 7584 6660; flyroyalbrunei.com), which has return flights from Heathrow to Bali, via Brunei, from £523 in economy and £2,710 in business class, with a Dreamliner service on long-haul routes.

Staying there

The bespoke travel experts Experience Travel Group (020 3468 6268; experiencetravelgroup.com) can tailor-make a seven-night holiday to Nihiwatu (nihiwatu.com) from £3,973pp. This includes full-board villa accommodation, scheduled Nihiwatu excursions and activities on land and sea. Internal flights and transfers within Indonesia and return international flight are also included.

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Seminyak from sunset to moonrise

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Seminyak from sunset to moonrise

THE scene from more than a decade ago has not changed much, locals and tourists gather by the beachfront to catch the sunset sipping on cocktails and beers.

With the surfers and backpackers outnumbering the luxury tourists, the beachside shacks ruled the shoreline scene where it was more relaxed, drinks cost less and locals were regulars.

With Bali turning into one of Southeast Asia’s major destinations, tourists pour in great numbers at any time of the year. Today, the game has been upped and the coastline is prime property. Luxury has taken over the scene that even the shacks have become fancier to attract the tourists. The battle for patronage has gotten stiffer.

Sun worship has gotten rather dear, if you opt to be in one of these most sought after haunts along the Seminyak beach. These spots got me curious because it’s what I’ve been told to check out, so I did. Just like before, I used the beach as the access road to these popular joints—Potato Head, Ku De Ta and W Hotel’s Wet.

Spaced a distance from each other, it’s easy to locate these bars, just let the sound of the music lead you to them. Coming near each establishment, people are lining up by the entrances to enter.

The vibe of each place is pretty much the same. A house DJ spinning to a mixed crowd of international sun worshippers frolicking in the pool and on the daybeds by it, and on the open-air upper and lower sundecks that offers an unobstructed view of the Indian Ocean where the famed Balinese sun sets.

Potato Head “seem to lead” the pack along coastline. Why it came highly recommended among the day to night to wee hours party crowd was soon revealed to me in a case of “if you build it, they will come.”

The Beach Club’s architectural detailing is impressive. So Bali chic, the modern structure draws the eye to its most prominent detail inspired by Rome’s Colosseum—a towering elliptical facade of mismatch 18th century teak window shutters collected from across the Indonesian archipelago. It wraps the ocean-facing property to include two restaurants facing a wide lawn that leads to the infinity pool.

Packaged with a menu that promises good food prepared by a slew of chefs, creative cocktails masterminded by a mixologist, and priced “accordingly”, it attracts its target young and hip spenders and the curious tourists alike.

Ku De Ta, which opened in 2000, is said to have pioneered the “meeting place for the global village” concept in Bali with a blueprint that fused modern and minimalist with Balinese open air concept. The result, “an uninterrupted flow of energy” from the beach to the garden deck through the dining area to the entrance, is dubbed as timeless.

A decade and a half after, the tropical lifestyle destination is still on the list of best places to be making it a Balinese icon. Unchanged is its reputation as a good dining spot, attentive and gracious service, and the constant attractions of big name international performers.

WET is not a beach club but an amenity of the W Hotel. The huge irregular shaped swimming pool that mimics the Indonesian rice fields and the pool deck is for the exclusive use of the hotel guests. However, the popular and hip brand lures in walk-in patrons who wants to have a sip of a signature cocktail at sunset or have a souvenir shot by the logo on the beachfront (which I’m guilty of). After sundown, the crowd thins out to move to another spot.

If one comment I received held true, it is that geography defines the body type. While the surfing spots along the Canggu coastline gathers the lean, muscled bodies formed by the sport, the leisure-touristy Seminyak seaside pool clubs are the best places to spot the gym toned (and buffed) bodies.

With kilometers of coastline, Bali is host to a good number of beach clubs, restaurants and bars that puts “with a stunning view of the ocean and sunset” on top of its list and several are raved about.

At moonrise, the scene away from the ocean gets exciting.

Nighttime haunts in Bali are aplenty. The first time I visited, I scoured Bali’s nightscape, which had few bars and dance clubs. Today, it’s the opposite—on both accounts. The number of bars has increased and my need to see them decreased. With age comes a shift in priorities. However, I am not to be a killjoy in the company of good friends way younger than me, so I tagged along.

La Favela, along Jalan Kayu Aya or Oberoi Road, is very popular on this strip among locals and tourists. Muscled doormen guard the entrance making sure everyone who passes is above 18, which makes me believe this is more of a watering hole rather than a restobar.

The crowd is thick after dining hours inside this establishment with an al fresco area at the rear past the bar, maybe as thick as the cigarette smoke that can double as a fog machine but in an unhealthy kind of way. If you’re a nicotine junkie, then you’d feel at home here.

I like the interior of this place. It’s a mash up of vintage furniture and accessories that come together in a cohesive way, perhaps just like the music, an unpredictable line up of retro to current that seem to work for everyone (well, mostly) in the club.

My stay in Bali was short but sweet, and I barely scratched the surface of the culinary and bar scene. Well, that’s good enough reason to head back. Join me?

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Bali outstrips glamour destinations for villa investments

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Bali outstrips glamour destinations for villa investments

Bali is eclipsing glamour destinations such as Ibiza and Mustique when it comes to real estate investment performance.

With villas on the market for up to $US11.5 million ($16m), Semin­yak remains the most popular precinct on the so-called island of the gods, earning villa owners gross revenues of $US76,270 a year, ­outstripping returns from beachside Sanur (a favourite haunt of expats) and Ubud (home to yoga and spa lovers), according to research from Villa-Bali.com.

Given the cocktails, designer food and entertainment, one can live the glamorous rock star life in Seminyak, hopping from one trendy nightspot to another. It has led to enormous price growth and if the local government proceeds with a new international airport on Bali’s north coast, connected to the south with a toll road, land prices around the airport will skyrocket.

Villa owner and development consultant John Blyther has owned Belong Dua, a traditional- style villa at Seseh, a small fishing village on Bali’s southwest coast, since 2007.

“It is a labour of love if you like,” says British-born Blyther, an architect. “I think sometimes these villas appreciate over time, but they were not necessarily developed from a hard-nosed spread- sheet perspective.

“That is the mistake some make if they look at owning a villa in Bali with a guaranteed short-term return. It is a little bit of a labour of love; if you invest well you do well because the capital value increases.”

Blyther says short-term returns are possible but investors should not expect returns every year. “There has to be a love component. My wife is Balinese and that helps. I am very happy, I think the quality of life is very good.”

Blyther, whose villa is managed by luxury villa rental agency Elite Havens, says he was ­attracted to Seseh as it is rare for a Balinese ­village to be so close to the beach.

Back in Seminyak, at properties such as The Layar, a designer complex of 23 villas managed by Elite Havens, it is typical for Asian owners to spend one month each year in a two-bedroom villa, renting out the six-star villa during the rest of the year to cashed-up holiday-makers from Australia, Singapore and, in a sign of the island’s growing international status, the Middle East.

Despite Bali’s strong villa rental market, Andrew Hay, Knight Frank’s London-based global head of residential, says the Indonesian island is a tough place to do business. “But we love it,” he adds.

Elite Havens and Knight Frank joined forces several years ago to operate Bali’s largest villa management and sales company. “The leasing business is phenomenally successful but the sales market is pretty tough,” Hay says. “The government has not been helping things in terms of people trying to work out what is happening next and whether they should invest.

“There has been a lot of rumoured anti-overseas investment legislation which has not come to fruition but the thought of it has scared people away.”

Foreigners are not allowed to own real estate in Indonesia outright but they can co-own it with an Indonesian-born citizen. “There are a few British and Europeans wanting to invest,” says Hay. “I have a client who has property in America, Europe and Bali, but ­investing in Bali is for the more ­adventurous.”

 

Foreigners can hold long-term leases over villas and land, says Sydney-based property consultant and architect Rodney Jensen, a frequent visitor: “This means you have to sign up for 20 years or be married or on good terms with an Indonesian national. The biggest risk is the exchange rate … the value of your investment depends on the exchange rate.”

Seminyak-based Elite Havens director Matthew Georgeson says Bali’s villa investment market is picking up. “We have seen a jump in the market due to Australian buyers lately,” he says. “Australians make up 20 per cent of Bali’s purchasers. I am surprised with the dropping Australian dollar there is this interest but the market has definitely bounced back.

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