Dollar Investors Bag Bargains in Bali

The Indonesian island of Bali is a popular destination for holiday home purchases and following property price declines throughout 2015, there are now plenty of opportunities for significant deals in its property market.

Increasing numbers of luxury buyers in dollars are taking notice. Barry King, managing director at Prime Real Estate, says that thanks to price declines on villas, the firm sold around 20% more properties priced over $3 million last year.

The number of wealthy Chinese buyers in the southeast Asian market of Bali is already on the rise, buoyed by a weakened yuan and volatility in Chinese markets, adding pressure on wealthy Chinese nationals to get money out of the country.

The island of Bali saw an 11.3% drop in the Indonesian rupiah against the US 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, she added.

Many property investors are looking to Bali for affordability compared with property prices in nearby Hong Kong, ranked one of the most expensive destinations for housing in the world.

Its warm weather, stunning landscape and welcoming culture makes Bali one of the world's most desirable places to live. Visitors just can't seem to get enough of the glorious island, and more and more holidaymakers are either turning their short trips into permanent stays or securing holiday homes that they can retreat to whenever they feel the urge.

Luxurious villas by the ocean and comfortable family homes nestled in the mountains are being snapped up quickly, making Bali a hot spot not just for international home buyers looking for their own slice of heaven, but also for astute property investors.

Bali's luxury property market is progressively attracting more and more property tycoons looking to cash in on capital gains and build a healthy property portfolio in a market that has seen rapid growth over the past few years.

Indonesian law places restrictions on the ability of foreigners to purchase property in Bali. These laws aim to keep ownership within Indonesia and protect the country's booming economy. However, as long as the property is not part of government subsidised housing, foreigners are allowed to invest in commercial and residential real estate or property as an investment.