Bali rental market: Bingin Uluwatu, Bali’s rising star

Bali, one of the world’s most popular travel designations, is also a property investment hotspot for international investors where it offers a wide range of property options and remarkable investment returns. 

There are several key factors driving the growth of the local real estate market: 

Tourism: The vibrancy of the tourism industry in Bali is directly linked to the property rental returns (rate and occupancy) and the property value. According to the Bali Central Statistics Agency (BPS Bali), the first quarter of 2023 had a record-high number of international arrivals, with more than 350,000 visitors per month on average. The high volume of arrivals made occupancy rates for Bali overall reach 62.8% in February 2023, with villas having a much higher occupancy rate than hotels. It is projected that the demand and revenue growth for properties will continue to increase. 

The number of nights booked has been rising from 42,621 in Q2 2020 to 58,396 in Q2 2023. Source from AirDNA.

Legal and regulatory environment: The Indonesian government launched several favourable policies and incentives for FDI. A significant announcement is the country launched a "second home visa" program in 2022 that will allow foreigners to stay and work in the country for five to 10 years, this is going to attract more foreign investors and boost tourism. The scheme also helps the island to be an even more attractive destination for foreign investors who are looking to invest in the local property market. 

Bali has strict property regulations that are put in place to ensure the safety and well-being of tenants and residents. Compliance with Bali property regulations is a legal requirement, it can help protect property values, and ensure that properties are maintained to a certain standard. It can also help attract and retain tenants as well as secure financing for future property investments. Failure to comply with these regulations can result in legal penalties, such as fines, lawsuits, or even criminal charges. 

In short, well-bought properties in Bali can offer international investors predictable rental returns, tax breaks, asset diversification, and protection against inflation as well as create wealth. 

In this article, we are going to discuss rental returns and explain why villas in Uluwatu should be on your investment radar. 

Location Matters 

Apart from the beautiful beaches, delicious food, and wealth of heritage, Bali is also known for its traffic. Bali has experienced a significant increase in tourism in recent years, with millions of visitors coming to the island every year, causing heavy traffic on the road where there is a lack of adequate infrastructure to support the increasing number of vehicles. Places like Kuta, Seminyak and Canggu, are known for their nightlife, restaurants and shops, however, these locations can be incredibly congested, with traffic jams that can last for hours, particularly during peak tourist season. 

Uluwatu has become a new travel destination in Bali, it has a vibrant community and the beaches are believed to be much more beautiful than the ones in Canggu. Bingin in Uluwatu, is the area that many investors are eyeing. It has a unique combination of scenic white-sand beaches, luxury venues and relaxed villages. Most importantly, it has well-developed infrastructure and is convenient and accessible. 

• ‍Ngurah Rai Airport: 30-45 minutes (25% of the time needed to get to Canggu)
• Hospitals: 20-40 minutes
• International Schools: about 40 minutes
• Shopping: 10-20 minutes
• Restaurants & Bars: 5 minutes

The overall infrastructure in the area is less congested compared to Canggu and Seminyak, offering a serene environment for guests to enjoy. Furthermore, the central Indonesian government is wholeheartedly supporting the development of Uluwatu's infrastructure with significant financing packages.

At the same time, the area is very accessible to more than 15 beautiful beaches all within a short drive, as well as many top cafes, restaurants, and ‘beach club’-style cliff clubs like Ulu Cliffhouse, Single Fin, El Kabron, and the internationally renowned Savaya making the region known for entertainment as well as an island lifestyle.

Rentability and Investment Return

Bingin and Uluwatu district are strategic locations for investors who are looking for high returns (rental price and capital appreciation) on their investments. There is only a limited supply of land near coastal and beach areas with roads built for easy access, the demand for luxury rental properties in these areas is very strong. 

Bingin, in particular, is becoming a popular location for short-term rentals. The area’s popularity with tourists and expatriates, coupled with the limited supply of luxury property, means that there is a huge demand for rental properties in Bingin. Investing in villas in Bingin can generate significant passive income through short-term rentals for property owners. 

Take ADAYA, Palm Developments’ new luxury villa development project as an example - it offers an unparalleled passive investment opportunity with 5-star service for investors. Given the strong short-term rental demand, the villas can be easily rented out at a price of US$250 a night for one-bedroom villas or US$520 a night for three-bedroom villas, with a conservative estimation of an 83-85% occupancy rate throughout the year. Investing in ADAYA villas in Bingin can offer investors a US$40,000-US$92,000 target annual income, for about 20-24% Return on Investment (ROI). In addition, Palm offers fixed interest during the construction period, which means investors will start earning their income from day-1 of their investment so they won’t lose their time and opportunity cost. 

The area surrounding ADAYA is the prime area within Bali's new prime area Bingin, with minutes accessibility to beaches, restaurants, facilities and amenities.

Overall, the Bali property market in the first quarter of 2023 is showing excellent growth. International visitor numbers have hit new highs, and the occupancy rate of rental properties is surpassing pre-pandemic levels. Bingin in Uluwatu, presents a wealth of opportunities for property investors, not only is it becoming one of the most popular areas for villa rentals with its rich amenities and activities, but also it is showing impressive rental and value growth. Contact Palm’s Developments for more information. 

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