Real estate investment is an enticing venture for savvy investors looking for the next great opportunity in exotic locations.

Two of the most popular in Southeast Asia are historically Bali in Indonesia and, recently Phuket in Thailand, both of which have attracted considerable attention from those looking to diversify their investment portfolios.

While both offer unique advantages, Bali stands out as the better choice for investors looking to maximize returns and experience sustainable growth.

Ease of Investment

As one of Indonesia’s 17,000-plus islands, Bali enjoys a stable and transparent legal framework for real estate investment and is the jewel in Indonesia’s tourism crown. And with thirty international flight routes serving Bali’s airport, the island’s tourism numbers are already approaching pre-pandemic levels with forecasts predicting a return to record numbers by year’s end.

The Indonesian government has also recently implemented favorable regulations to encourage foreign investment, making it easier for investors to navigate the property-buying process. The announcement of a “Second-Home Visa” for example, supports these initiatives and is expected to attract even more foreign investments across many sectors.

Property rights are well-protected in Bali, providing investors with a secure investment environment. In contrast, Thailand has more complex ownership laws, restrictions on land ownership by foreigners and ‘hidden transaction fees’ to consider, which include transfer fees, stamp duty, withholding tax, legal fees, due diligence, maintenance fees, business tax, property tax, insurance and agency fees, all of which can make the investment process more challenging and less secure.

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Projected Rental Earnings of ROI 12%++ P.A.
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Political Stability and Economic Growth

In a recent article posted in Tempo, Indonesia’s Ministry of Finance predicted that the upcoming elections will have a positive impact on Indonesia, including “accelerating economic transformation and structural reforms that will increase the ease of doing business, seize opportunities for industrial relocation, and strengthen the competitiveness of export and investment products.”

It’s worth noting that political stability is a crucial factor for real estate investors as it directly impacts the overall investment climate, regulatory framework, and long-term prospects of a market. And it’s true that both Indonesia and Thailand, have experienced periods of political transition and occasional unrest in the past. However, Thailand has had a relatively higher degree of political volatility over the years compared to Indonesia and has experienced a series of significant political changes, including military coups and protests, which have resulted in risky fluctuations in the political landscape. These events have occasionally led to uncertainty and disruptions in the country’s governance. While Thailand has made efforts to maintain stability, investors may perceive a higher level of political risk when considering real estate investments.

Tourism Potential and Rental

Income Bali’s popularity as a global tourist destination continues to soar, attracting millions of visitors each year. The island’s fabulous landscapes, unique and vibrant culture, as well as warm hospitality make it a perennial favorite among travelers and expatriates alike.

This thriving tourism industry translates into significant rental income potential for real estate investors. With a robust demand for holiday rentals, investors in Bali can enjoy attractive rental yields and a steady stream of income. Thailand, on the other hand, while also a popular tourist destination, faces more competition from other regions within the country, potentially impacting rental yields.

Affordable Property Prices and Favourable Exchange Rates

Bali offers a favorable investment climate because of relatively affordable property prices compared to other sought-after destinations in Southeast Asia. Investors can find excellent opportunities to purchase villas, resorts, and commercial properties at very competitive prices, ensuring better ROI potential. Additionally, favorable exchange rates for most foreign investors further enhance the affordability factor. In contrast, even though Thailand’s property market has experienced significant growth, the result has led to rising prices and therefore potentially lower returns on investment.

As the largest economy in Southeast Asia, Indonesia has demonstrated a strong commitment to political stability and economic growth under the Jokowi administration, enjoying a peaceful political environment, with regular democratic elections and a well-established governance structure.

Infrastructure and Development

Bali has undergone substantial infrastructure development in the past few years, with ongoing improvements in roads, the international airport, and utilities. This development enhances accessibility and convenience for residents and visitors, ultimately driving the value of real estate investments. What’s more, the local government in Bali has been proactive in maintaining a sustainable development approach, ensuring that the island’s natural beauty and cultural heritage are preserved. While Thailand offers a well-developed infrastructure, Bali’s focused efforts towards sustainable development and recent initiatives to address issues surrounding quality rather than quantity (mass tourism) make it an appealing choice for investors seeking long-term value appreciation and looking to tap into the growing global trend for experiential travel.

Lifestyle and Investment

Diversification Investing in Bali not only provides financial benefits but also offers investors an opportunity to enjoy a unique lifestyle. The island’s tranquil environment, spiritual traditions, and world-class amenities make it an ideal place to live or visit. Bali’s expat community is thriving, fostering a vibrant international culture that appeals to investors looking to immerse themselves in a diverse and welcoming community.

Investing in Bali provides the added advantage of diversifying investment portfolios across multiple sectors, including hospitality, tourism, and real estate. A good case in point is Mirah Investment & Development’s Secana Beachtown, a unique and iconic lifestyle concept and home to 90-serviced residences, a high-tech gym, spa, and co-working space as well as three world-class Food & Beverage outlets, in Berawa, Canggu’s most popular destination.

The future looks bright and if you’re interested in investing in property in Bali get in touch with us at Mirah Investment & Development, Bali’s leading property developer with 11 ongoing development projects currently under construction. Established as the market leader with years of experience in bringing luxury developments to the most sought-after locations across the Indonesian archipelago, Mirah Investment & Development has built an extensive in-house team of locals and expatriates offering end-to-end services from architecture and design, property management, and legal support, to taxation and immigration, for all clients.

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