JAKARTA: Foreign investors are pouring money into Bali property on promises of double-digit returns even as authorities tighten scrutiny on rentals and foreign ownership structures that have long underpinned the real estate boom.
Developers across the Island are increasingly marketing investment yields of as much as 17 per cent, betting that strong tourism demand, remote work and an influx of wealthy foreigners could sustain returns despite a broader slowdown in the country’s overall property market.
Tourism recovery, remote work and geopolitical shifts have widened Bali’s appeal beyond its traditional base of holidaymakers, drawing a broader mix of foreign investors seeking both lifestyle and returns, said Zaq Qureshi, vice president at Bali-based brokerage Ayla Property.
“It’s not only digital nomads anymore and it’s not only Australians. We’re seeing high-net-worth investors looking at Bali as well,” Qureshi told The Jakarta Post on Monday.
Recent years have brought an influx of Russians, Ukrainians and more Europeans, including a growing number of wealthy individuals viewing the island as an attractive alternative to park capital amid geopolitical uncertainty, he added.
Bali has emerged as a “relatively lower-cost” investment destination with fewer barriers to entry as some global investors reassessed markets such as Dubai and Thailand, while developers increasingly tailored products to foreign demand through designs, rental management and investment-focused offerings.
The investment pitch is concentrated in Bali’s short-term rental market, where developers typically project yields based on occupancy rates and nightly pricing.
Ayla Property’s analysis of more than 600 listings found the strongest projected returns in areas such as Nusa Dua and Ubud, while mature hotspots including Seminyak and Pererenan offered more conservative returns despite higher prices.
More than 80 per cent of developers accepted cryptocurrency payments, while long-term lease structures and company ownership models had become increasingly common. The business model has evolved to cater to absentee buyers.
Nearly all developers offer constructions and in-house rental management, allowing villas or apartments to be marketed on platforms such as Airbnb or online travel agencies, effectively turning villas and apartments into turnkey investment products.
The scale of Bali’s short-term rental economy helps explain the appeal.
Airbnb claimed Bali’s activity contribute Rp 17.5 trillion (US$972 million) to the country’s gross domestic product in 2024, according to a 2025 Airbnb-Oxford Economics report.
However, the investment rush is colliding with a government crackdown on unlicensed tourist accommodation across Bali while tightening scrutiny of nominee-style ownership structures, long a source of foreign capital and a common workaround for foreign buyers to bypass ownership rules.
Bali authorities introduced Regional Government Regulation No. 4/2026 in February aimed at curbing the conversion of productive farmland and banning nominee-style ownership arrangements used to circumvent such property restrictions.
Separately, the Tourism Ministry ordered accommodation providers to secure operating permits by May 31, though compliance has remained patchy.
The tighter rules were accelerating a shift away from informal ownership arrangements toward more institutionalized investment structures such as PT PMA, Indonesia’s foreign investment company structure, according to Qureshi.
“The tightening of regulations shouldn’t scare investors. If anything, it should reassure them. If things are done properly, increased regulation should reassure the sensible, mature investor,” he said.
Risk beneath the returns
The model of selling apartments or villas as investment assets that are later rented out is still relatively new in Indonesia, though similar concepts such as condotels have previously struggled to gain traction, according to Monica Koesnovagril, head of advisory services at Colliers Indonesia.
Because most buyers in the segment are foreigners, the trend is contributing to rising land prices, while demand for freehold properties, whose supply is limited, is pushing valuations even higher and increasingly puts them in competition with hotels, Monica told the Post on Wednesday (June 3).
The weakening rupiah combined with increasing foreign tourist arrivals had turned Bali property relatively more attractive and affordable for investors transacting in foreign currencies, said Colliers Indonesia research head Ferry Salanto.
However, he cautioned that the double-digit yields marketed by some developers often reflect best-case scenarios and depend heavily on occupancy rates, rental pricing, management quality and sustained tourism demand.
“As supply of villas and short-term accommodation continues to increase, competition is also becoming tighter, and there is a risk of oversupply in certain submarkets,” Ferry told the Post on Wednesday, adding investors should view Bali as a market with business risks rather than one automatically guaranteeing high returns.
The rapid growth of short-term rental accommodation, if left unchecked, risked triggering zoning violations, encroachment on protected rice fields and breaches of coastal and river buffer zones, while also driving up land prices and rental costs, said Kadek Adnyana, chairman of the Bali Villa Rental and Management Association (BVRMA).
Foreign investment in Bali’s property market should not be driven solely by short-term gains or high yields, but also by a commitment to sustainable tourism development, he warned.
Tighter rules on noncompliant villa listings and the Rp 10 billion minimum threshold for foreign investment would improve business certainty while leaving room for local players to compete, he added.
“Bali is not merely a property market, but a living cultural destination protected by its traditional communities,” Kadek told the Post on Wednesday.
“Any investment entering Bali must respect regulations, spatial planning, local culture and deliver tangible benefits to local communities.” - The Jakarta Post/ANN
