Introduction to the Indonesian market

Welcome to a world where investment opportunities are as diverse and dynamic as the archipelago itself. If you're reading this, chances are you're intrigued by Indonesia's economic landscape or considering an investment in its increasingly popular destinations: Bali and its rising star, Lombok.

But let's pause for a moment.

Bali, with its undeniable charm, is at a crossroads.

The question needs to be asked: is further investment in Bali a blessing or a curse to its natural beauty and charm?

Traffic, nature, pollution, accommodation options, and local culture—all influence tourist destinations. When choosing a vacation spot, travelers consider traffic conditions, seek serene routes, and avoid congestion. Natural beauty and attractions, like beaches, forests, and mountains, attract travelers.

In recent years, the concern for environmental issues has grown significantly, resulting in heightened awareness of pollution levels. Travelers are becoming more conscious of the impact their trips can have on the environment. Therefore, destinations that prioritize sustainable practices and environmental conservation tend to attract more visitors.

Is it time to turn our eyes to a new horizon ?

One that's equally enchanting yet less packed and busy ?

Enter Lombok, an island that's not just Bali's neighbor but a burgeoning gem in its own right. Lombok's approach to development is a lesson in learning from others' missteps – a journey of sustainable growth, backed by thoughtful government planning. So, before you make your next move, let's explore why Lombok, often called the 'New Bali,' might just be the investment haven you were looking for.

ROI, Evolution of the Real Estate Market, Pricing, and Trends

Indonesia's real estate scene is a burgeoning market, ripe with opportunities. With a goal to elevate its tourism profile, Indonesia, a nation of over 17,000 islands and a population north of 270 million, is more than just a market, it's a mosaic of investment potential.

General Outlook

Indonesia's property industry is notable for its high rental yields, ranking fifth in Asia with an average yield of 5.75%. This makes it an attractive market for foreign real estate investors.

Bali's market dynamics:

• Rental Yield: Residential properties in Bali average a rental yield of 42.4%, with commercial properties not far behind at 44.5%.

• ROI: Property investments in Bali typically yield returns between 12% and 20% annually.

Jakarta's real estate scene:

• Rental yield: In Jakarta, residential properties offer an average rental yield of 30.9%, while commercial properties yield about 10.8%.

• ROI: The ROI in Jakarta's property market ranges from 6% to 7% per annum.

Lombok's growing appeal:

• Rental Yield: In Lombok, residential properties like villas boast an average rental yield of 44%.

• ROI: Properties in Lombok see an ROI ranging from 12% to 28%, a testament to its emerging market status.

Lombok's emerging market: Investment considerations and opportunities

Navigating the investment landscape in Indonesia, particularly in a rising market like Lombok, requires a blend of local insight and legal acumen. How do foreign investors best traverse this terrain? It's about understanding the nuances of legal and administrative frameworks while aligning with sustainable development goals. We advise to search the support of trustworthy notary and lawyers.

The evolving landscape of South Lombok’s rental market

A three years retrospective: Subject a 3 bedrooms villa

In the ever-changing world of real estate, South Lombok's rental market has demonstrated a dynamic and evolving landscape over the past three years. Let’s delve deeper into the data for a 3 bedrooms villa, uncovering trends and patterns that not only reflect the past and present but also provide a window into the future.

A surge in occupancy: A tale of recovery and growth

The occupancy rates in South Lombok for this type of rental property have shown a remarkable journey of recovery and growth. Post-2020, the market witnessed a gradual increase in occupancy rates, signaling a resilient rebound from global challenges. This uptick is a testament to the region's growing appeal and the robustness of its rental market.

Rates and revenues

The average daily rates offered by properties in South Lombok have seen fluctuations, indicating a market that is responsive to both internal and external influences. Despite these variations, the overall trend has been towards stability, showcasing the market's ability to adapt and thrive. This adaptability is mirrored in the revenue trends, which have maintained a steady climb, underscoring a healthy and profitable sector.

RevPAR: The indicator of efficiency

Revenue per Available Room (RevPAR), is a crucial metric in the hospitality industry, and has shown impressive performance in South Lombok. This upward trajectory in RevPAR highlights the market's increasing efficiency and profitability, a key indicator for potential investors and stakeholders for this type of property!

Fresh data: How did a 3 bedrooms villa perform this year?

Average revenue of the last 12 months:

The revenue data shows significant earnings, with months like January 2023 showing particularly high revenue, indicative of a potentially lucrative period. To go in the details, a 3 bedroom, 3 baths villa in South Lombok did bring up to 116,7 Millions IDR, or 6.920€ in the month of January 2023. More recently those villa homeowners took home a nice average of 174 Millions IDR and 178 Millions IDR in July and August, equivalent to 10.320€ and 10.560€. With this in mind we can project a nice investment venture for those ones who are or are going to build a 3 beds villa in the South-Lombok Landscape.

Occupancy of the last 12 months:

The occupancy rates fluctuate across the year, with some months like March 2023 showing higher occupancy, which is a positive sign for potential investors. Since March 2023 this type of villa is showing good occupancy rates keeping in mind it is only the start of the South Lombok tourism growth. From around and above the 50% occupancy rate in March 2023 it went up to 74% in August then staying above the 60% for the last few months.
The market is showing a growing interest and the data don’t lie.

Rate day by day of last July, August & September:

The average daily rates vary across the year, with some days showing higher rates, potentially reflecting seasonal demand or special events. Here is the detail of the best months of the year, indicating high season.
Rates for this type of villa (3 Beds, 3 baths) is relatively high and range between 345€ to 820€ per night. During the Moto GP event, prices can go up to 980€ per night.

Future outlook: Projecting prosperity

The projections for future rental rates and occupancy reveal a promising outlook. With an expected continuation in the growth of both rates and occupancy, the market is poised for sustained prosperity. This projection is bolstered by the resilience and adaptability the market has shown in the past three years.

Rates for the future months are projected to range between 3,1 Millions IDR and 5,1 Millions IDR per night, equivalent to a bracket of 180€ to 300€ per night.

To Conclude

South Lombok's rental market is a vibrant and evolving landscape, marked by resilience, adaptability, and growth. The trends and insights we take from the past three years paint a picture of a market with a strong foundation and a bright future, making it an attractive prospect for investors and stakeholders.

The data and trends analyzed here offer a comprehensive overview of South Lombok's rental market. This market's resilience and adaptability make it a worthy case study in the broader context of the global real estate sector. As we look to the future, South Lombok stands out as a region with immense potential and a promising trajectory.