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The truth is that it all comes down to the particular item you buy and your expectations regarding it.
Bali is not experiencing any difficulties, but the market has changed and those investors who view it in the same way as they did in 2022 are likely to be let down.
So what really occurred to the market?
Following 2022, Bali experienced a surge in new developments. Supply increased rapidly. Many villas have now been added and more are still under construction. This growth led to a correction phase, during which nightly rates dropped and occupancy declined in many areas.
It's not a crash; rather, the market is settling down after a period of rapid growth. Although the opportunity remains, it now demands a more careful analysis than it did a few years ago, and the guide on how to research a Bali villa investment explains this approach by suggesting that you should look at market conditions first, followed by comparable properties and revenue figures, not just brochures.
The white box problem
If you look at the properties available in most parts of Bali nowadays, you'll notice a certain trend: they all have an open-plan living room, terrazzo floors, the same neutral colour scheme, and a rectangular pool that faces the same direction. The homes aren't bad, merely identical.
Since there are twenty different versions of the same villa available to guests, price is the only factor that differs. Nobody wins in such a situation, and as a result the owners end up competing on their nightly rate rather than on quality, causing returns to be reduced in all cases.
Properties that are well designed and well built are showing different results. It's not that they are in premium locations or that they have the largest pools. Rather, it is the properties which seem to have been thought out carefully, which have a clear approach or opinion, and which offer guests something that makes them worth booking compared to the other options that are out there that are achieving higher occupancy and rates, one thing that the average figures don't show in many areas.
Design is not an optional extra any more; it is a financial decision. The choices you make when purchasing a villa in Bali can show how occupancy rates, nightly rates, and revenue figures are able to differentiate ordinary listings from the top ones in the same area.
What areas ought you to be looking at?
The expansion of Canggu is now complete and it has a stable, well-established market with steady demand. The problem is that accommodation there has turned into a commodity. If you are to earn more than the average amount you need a property that actually stands out; a copycat villa in Canggu will perform just like a copycat villa.
The case with Uluwatu is different since the supply is large and development is still going on. A great deal of the building work has not yet appeared in rental performance. Although demand is increasing, it has not kept up with the supply. If you are patient and intend to hold onto the property for the long term, there are certain areas worth keeping an eye on. But if you need a return in the short term, the current figures do not allow for very optimistic assumptions in most of the peninsula.
The biggest mistake buyers make
Opinions spread quickly in Bali. An agent there has a friend who knows a developer. A buyer who was part of a Facebook group had a very good experience. A management company prepares a projection based on the performance of their most successful villa.
That doesn't mean it's dishonest at all; it's merely not data.
It is already difficult to invest in a foreign market, and when you can't go and see the area yourself or check the figures on your own, verifying what is being said becomes even more difficult. The investors who made bad decisions in Bali usually had no shortage of information; rather, they placed their trust in the wrong sources.
When looking at any figure you are given, you should consider where it actually originates from; first check how much money similar listings near your pin point to, and then subject the projection you have been given to scrutiny.
Is tourism holding up?
The number of international visitors is increasing and the type of people travelling to Bali is becoming more diverse. In addition to conventional tourism, there is now a larger group of visitors who stay for longer periods, including remote workers and families of expats who are moving there. Although these guests do not always appear in the data from short-term rentals, they are taking up properties on a monthly or annual basis, thereby using up the available supply in a manner that receives insufficient attention.
Supply tends to overtake demand trends in the short term, and Bali is no different. However, the fundamental demand pattern, more visitors, more residents, and more people selecting Bali as their base rather than just treating it as a holiday, is genuine and pointing in the correct direction across a number of sectors.
Is it still worthwhile then?
Yes, in the case of the right property. The market now rewards quality and punishes mediocrity to a greater extent than it did in the past. A distinctive and well carried out villa in a stable area, with realistic projections to support it, can still represent a solid investment.
A villa of a general type in a region where there is an excess of such villas, which had been purchased based on optimistic forecasts provided by someone who had something to sell, is a different matter.
The difference between those two outcomes is mostly information, and whether that information arrives as a dashboard or a report shapes how confidently you can use it.