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Bali - January 2009
No Toxic Assets in Bali!


 

While the financial markets tumble and the world plunges into recession, buying property in Bali could prove to be the smartest investment you ever made. Here's why.

Let the facts speak first:
A piece of 25 are of freehold land in Umalas (a village just 10 minutes from Seminyak) bought in 1997 for the equivalent of US$50,000 got sold in 2008 for US$380,000. That's a capital gain of 22.5% per annum.

A leasehold villa in Seminyak bought in 2006 for US$425,000 sold in 2008 for the amount of US$560,000. Add the rental income from operating two years on the villa holiday market and we are looking at a total return on investment not short of 25% per annum.

A 30 are cliff front property on the Bukit was sold for IDR150 million per are back in 2005. In July this year, that plot sold for IDR405 million/ are making the vendor an annual return of 40% on his investment.

A one hectare beachfront property in Tabanan bought in 2005 for IDR23 million/ are just sold for IDR80 million/ are. That's 50% capital gain per annum.

In January 2008, one hectare of hilltop land on the Bukit (Bali's southern peninsula) was bought for IDR65 million/are. Only five months later, the same land was sold for IDR90 million/are. Now you do the maths!

Compare this with the performance of the Dow Jones Industrial Average. On 7 November 1997 the index stood at 7.581 and 11 years later at 8.943. That's a whopping 1.67% increase per annum! Yes, the index was at 14.164 on 9 October 2007 and if you would have sold on that day you would have made just about 7.2% per annum over 10 years. If . but you didn't because your banker keeps telling you to take a long-term view on stocks. Complete rubbish. We don't need Keynes to remind us what happens in the long-run, do we?

If you haven't bought property in Bali yet, you are probably feeling sorry now for having missed out. Don't. Now is the time to get into the market again.

The Rupiah has just lost 30% of its value in the last three months and property prices haven't adjusted yet. They are going to remain flat for the next few months. Building costs are also set to remain flat or even decrease slightly due to falling prices on international commodity markets. We are also seeing that some developers are increasing discounts and adding incentives to attract investors.

That's why you need to get in now.

Did you just say, "it's too risky to buy now"? Think a moment and look back to what happened in Indonesia in the last decade: Asian financial crisis, banks collapsing, political turmoil, democratic elections, war in East Timor, bombs in Bali, SARS, Tsunami, Avian Flu.

And what did this all do to property investments in Bali?

Not much. Look at the facts above. Property prices did not plunge, they kept appreciating in US Dollar terms. They may have remained stable for a while, but not for long. Overall, property prices in Bali increased for at least 20% per annum over the last decade.

Enough! Call us now to get the best deals or face regret next year for not acting.

0ne are = 100m2

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