While southern Indonesia’s red hot resort property market has shown remarkable capital appreciation in the last five years, people are now asking: Have things gone too far, too fast?
With prime, smaller land plots around trendy Seminyak, Batu Belig and Canggu now hitting over USD2,000 per sqm, land is a barrier for profitable development scenarios. Add to the mix the height restriction (though driving around Bali today you can clearly see the island has the tallest coconut trees on the planet) and space for growth seems limited.
What’s currently creating a buzz is the emerging opportunities in greater Bali, which means getting in a boat or on a plane to look for the next big thing.
One case in point is South Bali’s outer islands, namely Nusa Lembongan, Nusa Ceningan and Nusa Panida (for those who don’t know, ‘nusa’ means ‘island’ in Javanese). Lembongan, which is home to some boutique hotels and a rising number of villas, offers easy access to Bali, stunning sunrises and sunsets, and a very cool surf scene. Land prices of late are seeing a range of USD200 to 300 per sqm.
If you are looking for outer island success stories such as New York’s Fire Island or Martha’s Vineyard south of Cape Cod, great escapes always evolve as urban sprawl raises its ugly head. Interestingly enough, on a recent visit to the island I met a few individuals who had tired of Bali’s traffic drone and preferred to commute daily from Sanur to work by boat. Key in the hashtag “quality of life” and that’s what drives people to be “oh so near yet oh so far away”.
Other rising stars are the three northern Gili’s – Meno, Trawangan and Air. Closer to Lombok than Bali, the trio has gone through a metamorphosis over the past two decades, changing from hammock and barefoot party islands into something decidedly more sophisticated and upmarket. While boutique hotels remain plentiful, there’s a shift toward more posh offerings and a handful of new developments such as BASK Gili Meno are set to change things dramatically.
Looking back over the past year, with resort grade land prices ranging from USD150 to USD250 per sqm, a shortage of available space is set to drive these numbers up further.
Meanwhile, the question of the ages, which is the conundrum of Lombok, remains poised on everyone’s lips: When will the vast resource of Bali’s lucrative formable neighbour be put to the test? With the entry of a new international airport and an increase in direct flights both domestically and internationally, it’s not a matter of “if” but more a matter of “when” things will come off the simmer to a boil.
Again boutique hotels are setting the trend near Senggigi, with Qunci Villas and Jeevi Klui drawing praises far and wide. A recent successful property launch took place nearby, with the Latitude 8.1 Property Group announcing fifty hotel-managed villas, which are flagged by hospitality group Archipelago’s Royal Kamuela brand. Meanwhile, emerging eco-design star, Charlie Hearn, of Inspiral Architecture, has also created a contemporary take on resort pool villas.
Strong sales have inspired a sense of bravado for a number of new projects on Lombok; mainly aimed at capturing the synergy between hospitality and residential offerings. Though land prices fluctuate throughout the island, with resort grade property in growth areas at the USD100 per sqm mark, expect pricing to accelerate as investor sentiment strengthens on the back of a growing number of success stories.
What’s left of greater Bali? While Sumba has been given worldwide prominence with Nihiwatu and Sumbawa offering diversity, it is highly leveraged in the mining sector. My pick has to be Flores. With fast door-to-door travel time from the airport to town, and mounting interest as the gateway to the Komodo National Park, real estate values have gone up fast in multiples of USD50 in recent memory, up over USD100 a sqm and beyond.