Bali’s pandemic renters face rude awakening as prices skyrocket

Wednesday, October 26, 2022

At the height of the pandemic, Maria, a refugee from the Philippines, paid 2.8 million rupiahs ($180) every month to rent a hotel room in Indonesia’s Bali.

But when international tourists began returning to the popular resort island en masse earlier this year, Maria’s hotel in Canggu, a coastal village popular with surfers and night revellers, hiked its prices five-fold.

One day they raised it to 400,000 rupiahs per day without any warning, Maria, who requested to be referred to by a pseudonym, told a news media.

As Bali rebounds from COVID-19, the cost of accommodation on the island is soaring in a sobering reality check for renters, many of them foreigners who sought shelter in Bali during the pandemic.

When Indonesia closed its borders in April 2020, reducing daily visitors from more than 44,000 to practically zero, many hotels pivoted to the long-term rental market to survive.

Hoteliers rolled out huge discounts to attract some of the tens of thousands of foreigners on the island.

Faced with increased competition, the island’s 4,000 holiday villas dropped asking prices by 50-75 percent to secure tenants.

With no way of knowing when or if tourists would return, hundreds of hotels ceased trading and were listed for sale.

But with international travel roaring back to life, Bali has become a landlord’s market practically overnight.

‘Going crazy’

In Cemagi, an upcoming tourist district of lush green rice fields located a half-hour drive from Canggu, property prices are rising even faster.

In 2019, the going rate for leased land — the most common ownership vehicle available for foreigners building stand-alone villas in Bali — was 8 million rupiahs ($513) per 100 square metres per year.

During the pandemic, prices fell to 6 million rupiahs ($385). Today the same land is being advertised for 12 million rupiahs ($770), and villa projects are popping up like mushrooms.

For two years during the pandemic nearly nothing was built but now it’s going crazy and there’s no way anyone can stop it, Markus Cristoph, the German owner of Udara, a yoga retreat in Seseh, told a news agency.

Although tourists are returning to Bali, visitor numbers remain well below pre-pandemic levels.

Bali saw about 276,650 arrivals in August – up 12 percent compared to July but less than half of the number reported during the same month in 2019.

Still, local observers say visitors have been highly concentrated in a handful of hotspots on the island.

Coupled with Bali’s small winding roads, the sudden population spike has resulted in chronic traffic congestion in the area.

The problem is especially pronounced in Berawa, the most popular beach and thoroughfare in Canggu and home of the new Atlas Beach Fest, the largest beach club in Southeast Asia with a capacity of 10,000 visitors per day.

Next door, Finns Beach Club welcomes up to 8,000 people each day.

Internal migration by expats and wealthy Indonesians is causing property values in other desirable parts of Bali to rise, too, said Manuele Mossoni, director of architectural firm 2M Design Lab.

Mossoni, who had to double his workforce to 30 staff members and move to larger premises this year to keep up with demand, believes property prices in Bali still have much higher to climb.

During the next five years, prices will increase even faster than now because there are so many people from Europe and America who realise after the bad period of the pandemic, Bali is a pretty good place to stay.

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