"Changing laws on foreign ownership are expected to drive Bali’s growing market, but now discussion is turning to leasehold vs. freehold
A longtime favourite destination for Asian and Western investors alike, Bali enjoyed 15 percent growth in its prime residential prices during 2014, based on a recent Knight Frank review. That impressive figure puts it at the top of the world’s island markets, ahead of the exclusive destinations of St Barts, Mustique, Sardinia and Ibiza, according to Australian Business Review.
The Indonesian island is about to get even hotter due to the relaxation of foreign ownership rules expected to be introduced by Joko Widodo’s government at some point this year, which will finally allow foreigners to own luxury property in the country.
Initially announced that foreigners would only be allowed to buy luxury apartments over the threshold of IDR5 billion (USD373,500), the Indonesian government has now confirmed that there will be no minimum values on properties foreigners will be allowed to purchase, reports the Jakarta Globe.
The only restriction will be the prohibition of buying state subsidised dwellings.
“We shouldn’t set any [price]limits. As long as [the buyer]has a residence permit, they should be able to choose wherever they want [to live],” said Ferry Mursyidan Baldan, minister of land and spatial planing. He confirmed that his office was in the stage of drafting the regulation.
Singaporean investors are expect to express a great deal of interest in buying in Bali, according to Bloomberg, with demand from this demographic expected to exponentially surge upon the introduction of the new rules.
“If you look at how close Jakarta is to Singapore, and given that a lot of Singaporeans also work in Indonesia, there will be interest from Singaporeans,” said Christine Li, director of research at property broker Cushman & Wakefield. “Indonesia is still one of the biggest ASEAN markets in terms of population (and) land size, so there’s definitely a lot of room to grow.”
Real estate agents also cite interest in Indonesian real estate from Chinese investors.
“Asian buyers are no doubt a sleeping giant for Indonesia,” said Nathan Ryan, owner of brokerage Bali Realty. “These buyers have plenty of money, but are turned away by the leasehold property options, as they would prefer to be able to buy freehold.”
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