A market analysis combining central bank data, platform statistics and regulatory context for an international investor audience.
Bali Property Market 2026: Analysis for International Investors
Bali remains one of the world's most attractive destinations for both holidaymakers, investors and those looking to settle abroad somewhere with a more relaxed lifestyle. Tourism has rebounded, international attention is high and new businesses continue to arrive on the island every week.
Still, discussions regarding Bali's property market are becoming more and more polarized, with real estate agents continuing to promise high ROI while conversations on social media talk of empty villas and supply surpassing demand.
So what is really going on with Bali's property market?
Tourism is Still on the Up
There are no doubts about whether tourism recovered in Bali or not. In 2024, Bali welcomed over 6.3 million international visitors, which was more than pre-pandemic times. Hotel occupancy, demand for accommodation and wellness services are still high.
Bank Indonesia, Indonesia's central bank, tracks residential property prices nationally through its Residential Property Price Index. The latest data shows residential price growth below 1% year-on-year in 2025 across Indonesia, indicating a broadly flat market across the country. While national growth remained limited, Bank Indonesia's specific data for Denpasar showed a modest residential price increase of approximately 1.08% in late 2025. It seems that even in Indonesia's most famous destination, price growth for standard residential housing is trailing significantly behind the commercial and tourism-driven sectors, except in areas such as Canggu, Uluwatu or Pererenan.
Bank Indonesia does not publish other data for residential prices in other areas in Bali in its public releases, but it does publish data on commercial property. In Q3 2025, Bali's Commercial Property Price Index rose 3.56% year-on-year, driven by improving demand in certain sectors. This is a positive sign for Bali, but growth ultimately depended more on the type of commercial property:
Hotels: +3.84%
Office / service buildings: +5.93%
Retail: +0.54%
Serviced apartments: –23.51%
As we can see, the reality of the market is quite nuanced. Some commercial properties are benefitting from tourism, whereas serviced apartments are clearly struggling to find their market.
The ROI Reality
If we take a glance at projections from real estate agents across the island, ROI projections for villas appear to be much higher, with some stating that 7-20% per year is possible, with predicted occupancy rates between 60-80%.
Whether these figures are achievable would most likely depend on the property in question being a uniquely designed offering in a prime location with a seamless guest experience. Regardless, many of these predictions come from estate agents who have a vested interest in painting an optimistic view of the market. They may be based on gross ROI, and once management fees, rental tax and high maintenance costs are factored in, the 'net' reality for most owners is likely to be much less than these figures.
Talk of Empty Villas
Alongside this financial reality is a growing supply issue that explains the 'empty villa' narrative seen on social media. Developers and agents have been pushing 'off-plan' developments and villas sold based on 3D renderings before construction begins, which has led to a saturation of 'cookie-cutter' properties in areas like Canggu and Pererenan. Because these thousands of new units share very similar aesthetics but lack unique branding or hotel-grade management, they are increasingly forced into price wars. Consequently, the 'empty villa' narrative on social media often stems from investors who bought into these projects without realizing that in a more mature 2026 market, high-quality service and architectural distinction are now more important than location alone.
More Houses on the Market
This shift is echoed by a visible surge in property listings on major platforms. According to Villa Finder's market study, Airbnb-style listings grew by 18% year-on-year by 2025, with booking values falling by 21.6%. This increase in listings and dip in booking suggests there may be a case of oversupply. As it has become more difficult to differentiate in a heavily saturated market, some developers are trying to leave the property market. Findings from an analysis of listings on Rumah123, a popular property listing website, showed that Bali villas for sale increased from 18,000 to 98,000 in a period of just a few months mid-2025.
The End of the Grey Market
Adding to the pressure is a background of much greater regulatory enforcement than ever before. The Indonesian government has set a deadline for all short-term rentals to be fully licensed through the Online Single Submission (OSS) system by March 2026. This means that those operating on Airbnb or Booking.com without a valid NIB (Business Identification Number) or the correct KBLI hospitality code could face severe consequences if caught. For those with villas built in the 'green zone,' getting one of these mandatory licenses may be virtually impossible at this stage, as zoning regulations have come much more into focus. This means that having a proper PT PMA structure is absolutely necessary for any property related business going forward. (cont…)