Buying your own slice of paradise

Despite everything, Australians do buy in Bali -attracted to the beauty, lifestyle and people.

The holidays are well and truly over. Surely, everyone will be back at work on Monday . . . if they’ve still got a job. With the financial situation so grim, many people will wish they could move to a tropical island to see out the rest of the year.

What about Bali? OK, so there’s been the Schapelle Corby and Bali Nine dramas, terrorist attacks, executions, threats of reprisals, security warnings, rapes and murders, even a rabies scare and a booze shortage recently but Australians do buy property there.

“There’s a whole heap of Australians,” says Charles, a Sydney caterer who bought land in Bali several years ago and intends to build a villa.

“I just fell in love with the island, the people, the scenery and the fact it offers such a relaxed lifestyle . . . and no one’s going to deny having cheap household help can swing the deal.”

This opportunity to live in the lap of luxury, complete with staff, at a relatively affordable price has transformed the Bali tourism market in the past decade - particularly around Seminyak, a haven for upmarket restaurants.

Some love it so much, they want to own a place in Bali for holidays, to rent out and eventually live in. Despite the 2002 and 2005 bombings, by last September, when Domain visited, agents said buyers were more concerned about movements in the dollar than terrorism.

Phone calls this week, though, revealed the financial crisis has had an impact and some luxury villas have had price drops of 30 per cent.

“We have a number of foreign owners who have lost money in the stockmarket and they need liquidity,” says Mike Pugh of Exotiq Real Estate in Seminyak.

Last year, when the Australian dollar was strong, nearly half his sales were to Australians.

“Especially when it went above 90 [cents to the US dollar] we had a mad rush of people coming to buy,” he says. (This week, it was 66 cents.)

Even now, some of the villas - especially with the price drops - look appealing. Particularly if you’re still employed or have a healthy redundancy cheque. Most of the foreign buyers in Bali are so rich they don’t need to borrow from a bank, which is fortunate since it’s impossible to get a loan either within Indonesia (unless they marry a local) or at home. There are also restrictions for foreigners buying freehold, though they can easily buy leasehold. Many keep quiet about their purchases for tax reasons.

“Bali is a cash market and there are no subprime mortgage meltdowns here and there are no bankruptcies or foreclosures, the only problems are that some of the developers have got their initial funding from foreign banks, which is proving difficult for some,” Pugh says.

Mira Sawitz of Jones Lang LaSalle says the financial crisis has had an impact.

“Inquiry is slowing down and clients who were hot prospects have decided to postpone their decision to buy anything,” she says.

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