If there’s a spot left, I’ll take it.
Rising values in Bali’s most popular party town are making this a real hot spot for investors.
There are no doubts that Seminyak has one of the hottest residential real estate markets in Bali. The energy in the area is palpable, with gleaming new boutiques, restaurants, bars and nightclubs springing up seemingly from one week to the next.
Alongside this, Seminyak is experiencing an unprecedented level of real estate development, with private villas, villa complexes, apartments and resorts thronging its beach fronts and the quiet village roads behind them. In the last 18 months alone, four major new players have entered the real estate fray as both developers and agents, while a new brand of investment savvy clientele is casting its eye upon Seminyak.
If any single factor sparked the evolution of Seminyak into the upmarket destination it has become, it was the appearance of the Oberoi hotel. Built in 1974 and bought by the Oberoi group 4 years later, it spearheaded development northward up the coast from Kuta and set a benchmark in terms of design and exclusivity. The Intan was another hotel that had a major impact in terms of infrastructure, establishing the now highly recognised Petitenget loop by extending the road from the Oberoi towards the adjoining village of Batubelig.
Starting its life as a kind of peaceful suburb set apart from the bustling fairground atmosphere of Kuta, it was natural that Seminyak would evolve at right angles to it. Where Kuta’s traditional warung style bars and cafes, big surf stores and fake watches attract package tourists and backpackers, the same stretch of road in Seminyak is populated by chic boutiques, home ware stores and sophisticated eateries.
Jl. Dhyana Pura, just off the main drag, is crammed with high concept designer bars and clubs while Jl. Laksmana, often called Jl. Oberoi after the hotel that was its defining landmark, is known in local Seminyak parlance simply as Eat Street so prolific are its restaurants.
Starting its life as a kind of peaceful suburb set apart from the bustling fairground atmosphere of Kuta
According to Mark and Andy of Paradise Property, there has been a paradigm shift in the type of people coming into Seminyak. “We’re finding a real strength in depth of ex-pats with both business and lifestyle interests,” says Andy, “people looking to make a sound investment and at the same time buy into this ideal of high end tropical living.”
While the commercial market initially forced the pace of real estate development in the area, it is the latter that is now the most dynamic area of business in Seminyak. Private villa enterprises continue to flourish – dream homes built by individuals and made available via the rental market – but they are being joined by a new breed of fully managed, self contained lifestyle resorts such as the 'W' Hotel due to launch in 2010.
“Seminyak will benefit from big operations like this, they add variety,” says Mark.
As regards the private villa market, Andy for one would like to see a move towards big, palatial villas once more. To his mind, many so called villas are not villas at all, but really self catering houses. “More of these deluxe, highly spacious properties would limit the environmental impact and attract a certain type of clientele. It’s easier for an area to support 2 premium quality villas than 20 smaller ones.”
In the end of course, demand will dictate the direction Seminyak takes in terms of real estate development and at the moment that demand is going through the roof. According to Ric Shreves of the Elite Havens Group, investors are attracted by the excellent capital appreciation of land, solid occupancy rates and good rental returns. “Seminyak has so much going for it – great accessibility to the airport via the new Sunset road, landmark beach front venues like Ku De Ta and La Lucciola, great shopping and of course the restaurants. Basically, it’s a very strong brand,” he explains.
As well as acting as an agent, Elite Havens Group is involved in custom building under the name Bali Homes Management. “The market is essentially divided between serious investors and dream home builders,” says Ric, “we can help the latter source land, match them up with architects and even get involved in the construction process as concept consultants.”
With Seminyak achieving a growing reputation internationally via extensive media interest, the travel industry and word of mouth, Elite Havens is seeing an increase in the number of offshore investors, where before the majority were local or regional.
Because financing is not available in Bali, buyers tend to be stable with significant expendable incomes – what they choose to spend that money on relates as much to lifestyle choices as to financial practicability. Many of Ric’s clients still seek free standing villas as opposed to complexes, though in Seminyak these are becoming increasingly expensive. Says Ric, “the resale price has risen by somewhere around 20% in the last year – for a leasehold property, you’re looking from around $250,000. As for freehold, there is no longer freehold land available in Seminyak.”
The property boom in Seminyak shows little indication of slowing down, in fact development continues to push inexorably northward up the coast towards areas like the still tranquil villages of Canggu and as far as Tanah Lot, famous for its breathtaking temple.
Local resident Grant McArthur has lived in Seminyak for twelve years – “when I first moved here, most of Seminyak was still just rice fields – La Lucciola was the only restaurant,” he comments, “of course the area has changed enormously since then.”
The plus side, as he sees it, is the cosmopolitan atmosphere Seminyak now enjoys, with an increasingly diverse mix of residents together with improved infrastructure and an array of leisure choices – “yes, it’s more crowded, but visitors to Seminyak are hardly seeking solitude.”
Yet despite the fever of development, Seminyak retains a colloquial atmosphere, due in part to the famous edict stating that no building may exceed the height of the tallest coconut palm. The Balinese have shown a remarkable ability to absorb the influx of entrepreneurs and tourists and the area’s cultural life – the enchanting cycle of ceremonies, festivals and daily rituals that makes Bali unique – continues to thrive. This balance of contemporary chic and long established custom is what gives Seminyak its charm, an equation that promises exponential growth and development in the foreseeable future.
A note on property prices
The Seminyak property market is bouyant but there remains a wide disparity in prices. A two bedroom villa with swimming pool could cost anything from $250,000 to $600,000 + depending on factors such as location, level of luxury, space and whether the property is leasehold or freehold, while larger villas reach prices of $1,000,000+ and more.
Apartments vary similarly in price. A two bedroom apartment in the Ocean development is priced at just over $400,000 for 100 year lease, while The Regency Apartments off Jl Oberoi are offering a 3 bedroom en suite penthouse apartment from $240,000 (99 year lease).
By Rufus Johnson
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