Hi Bali property readers. I just got news from one of the Bali property agent here exactly in Bali. Seems in a condition of world financial crisis there is still hope even good respond in property investment. Here is the story I quoted from their newsletter.

Unlike many companies dealing with Bali Property, our company has been exceptionally busy, handling many new sellers’ and buyers’ inquiries and requests. We feel strong agreement with the outlook as presented in a recent story in the International Herald Tribune (IHT, online) which carried the title “Bali’s cash property market keeps prices up”.

KEY POINT about the story: the story carried the typical bias of communicating mostly about foreigners in Bali who purchase apartments, homes and villas. This strong component of property transactions will seldom be able to achieve financing for their purchase, although we keep hearing rumors that this situation may conditionally improve in the near term. We feel the story is correct that there is a significant “cash nature” to the property marketplace. Thus when, in many property markets around the world, the banks and other stressed financial institutions have to foreclose on properties and offer them back into the market – sometimes at a lower price, that is just NOT happening in Bali.

It would be our assessment that with very few exceptions, property prices are holding steady, or in some cases may be increasing slightly in those popular areas where the underlying land price has trended upward for many years.

The story from IHT quotes some industry luminaries, such as Mr Wetterlind from Tropical Homes and Gallmann of Exotiq as saying you can negotiate, but typically the properties they mention are those with asking prices above USD 1 million. Our experience is that those properties will typically allow some negotiation. BUT if our client/seller is already offering a nice beachfront villa for only USD 439,000 or ocean-side villa for only USD 355,000 then there is not a lot of room to negotiate. Mr Wetterlinid says transactions have “ground to a halt” but that has not be our experience at all. He also compares this market to that experienced after the 2002 bombing in Bali – and we cannot find any evidence of that reaction. In fact, the Bali tourist market is staying buoyant, and the international arrivals for the first quarter of this year have set a record as being an all-time high! And typically that is a good sign for Bali’s property interest levels.

Mr Gallman says “in uncertain times, you must own your own land and house” and of course we agree with this concept. He also said that in the past, his company had backed Phuket, and you can see that most of the promoted properties on their web site are still from Phuket. But the instability of government leadership and growing militancy of protestors in Thailand have done a lot to make Bali seem even more safe, and stable and sane. This should bode well for allowing more Asian to prioritize their purchase toward Bali rather than Thailand. Mr Gallmann also mentions the returns on villas used to be 20 to 25% - but we are not aware of owners who are that greedy. In Sanur we tell buyers to target for 6 to 8% returns on investment (on annual rentals) plus gains on the asset values of their property. If you can return a cash value of 10% or higher, you are very lucky indeed!

No doubt to take this property investment chance in Bali. Even if you are looking for bali architecture design style for your property, you could make it true. Bali hasn’t lost the culture and environment attraction. Good luck!

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