Australian investors flock to Bali property market amid high interest rates at home

Australian investors are turning to Bali’s property market as an alternative to the increasingly unaffordable domestic housing market.

With Australia’s official cash rate at 4.1%, the highest in over a decade, and average investment interest rates at 6.4%, many Australians are looking overseas for property investments.

The Bingin area of Bali’s Uluwatu region has become a hotspot for foreign investors, with new developments like the Svara by Mazari Villas offering units from USD $232,800.

Isabel Whitaker, a 47-year-old chocolate shop owner from Oakdale, NSW, recently invested in a three-bedroom villa in the sold-out Mazari Villas Development.

“Property prices in Australia are unaffordable. I was seeking a retirement plan that allowed me the flexibility of a holiday region such as Bali, a region I have traveled to my whole life, and the stability of a home in Australia to be close to my family,” Whitaker said.

She added, “It’s likely that I will only use my 3 bedroom villa for up to four weeks in the whole year, so I am relying on income from the holiday rental to provide me with the return on investment which has been estimated between 15-20% net per annum.”

According to the Indonesian Government’s Investment Coordinating Council, investment in Bali’s real estate has grown by 28.5% in the past two years.

The region has established itself as a leading global hub for property investments, with annual returns ranging between 10-20%.

PT Mazari Properties Group, founded by 37-year-old Angela Udemba from the UK, has announced a new collection of villas named Svara by Mazari Villas.

“There aren’t many property markets like Bali,” Udemba said. “Bali is uniquely positioned, renowned not only for its natural beauty and welcoming culture but also for its ever-growing and improving offerings.”

The Indonesian government’s decision to expand visa categories has contributed to Bali’s appeal as both a tourist destination and a place to live.

While foreigners cannot own freehold land in Indonesia, the government has introduced a form of ownership known as Hak Sewa, which provides long-term leasehold rights.

Udemba explained, “The lease term in Bali is typically 25 to 30 years, and it’s common for the lease to be extended for another 25 or 30 years.”

The Svara development, located in the heart of Bingin, offers villas priced from USD$232,800 with a projected ROI of 15 to 20%.

Construction is set to begin in August 2024, with completion expected by October 2025.