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In an article on gapurabali.com and via his real estate blog, Dominique Gallmann, co-founder and CEO of Exotique Properties, has shared insightful comments on the state of Bali’s real estate market.
Now that COVID-19 and its devastating effect on Bali’s and the global economy have become a fixture of daily life for the past six months, Gallman looks at the Bali property market and tries to compare this crisis with calamities of the past that include, among others, a global financial crisis, SARS, two terrorist bombings, and a major volcanic eruption.
The current economic upheaval affecting Bali is different from those of the past. COVID-19 is at the root of a global recession in which tourism is among the worst affected economic sectors. In Bali, the property market is inextricably linked to tourism.
Where, in the past, terrorist bombings deadened demand and flatlined prices for a period, the COVID-19 crisis, according to Gallman, saw sales almost go to zero.
With its borders closed to visitors, foreign buyers are not traveling to the Island, and those that remained had lost their appetite for property. Gallman reports that some sales were being made in May, mainly undertaken by Indonesian buyers.
While real estate prices remained relatively stable during past upheavals, Bali now appears to be a “buyers’ market” for real estate in a sector searching for buyers who have proven few and far between.
As a result, Gallman says: “I am told that most of those deals that are being made these days are struck at prices between 30 – 50% below pre-COVID-19 asking prices, mostly freehold properties, of course, and in the middle and upper range of the price segment.”
Gallman’s suggest that some sellers have been slow to appreciate the severity of the currently depressed property market and are holding firm on price, at least for those properties offered online. Meanwhile, other “motivated sellers” are slashing prices by half but still failing to secure a buyer.
Gallman says those seriously looking to purchase should bid aggressively. “In this market, the only way to find out at what price a property is going to be sold for is to make an offer and see what happens,” he said.