Terje Nilsen, Director of Ray White Paradise Property Bali
Can you tell us a bit about Ray White as a business? is actually Ray White Paradise a franchise?
Ray White Paradise is actually a real estate brokerage business; we market along with sell properties such as villas, land, commercial buildings along with projects to a domestic along with international market. the item is actually a franchise originally through Australia, however our franchise agreement is actually with Ray White Indonesia.
When did you open your business along with how has the item been performing since then?
We have been doing business in Bali for more than 10 years at This specific point along with joined the Ray White network in May 2010. Since then we have seen a massive growth, partly due to the growth of the market in Bali, partly due to the business module Ray White provides us with.
How many staff members do you have along with how is actually the business structured?
We have about 50 brokers whom we refer to as partners not employees, along with around 25 admin people spread around our different offices. Each office focuses on each of their respective areas, with our partners who then source actively for listings, properties to market, as well as buyers along with clients. Our main office in Seminyak focuses on general marketing along with branding for us as a group. Once a sale is actually completed, there is actually a formula of how the commission is actually shared between office along with partners, depending on targets reached.
Tell us about the property market in Bali. Prices have increased exponentially over the last few years. Do you see a burst within the bubble coming up anytime soon?
The market in terms of size keeps growing, along with will do so for the foreseeable future, in not bad along with bad, with many challenges, as Bali’s economy relies over 80% on tourism. The main change we have seen within the market over the last few years is actually the domestic market growing massively. This specific has to do with the generally very strong Indonesian economy. The second largest market will be Australians as they are about 30% of the foreign arrivals to Bali. The third largest market is actually Asians along with expats living along with working within the Asian area.
I don’t see a burst within the market in general for many reasons. Indonesia’s economy is actually very strong along with also a dominant force in tourism to Bali, actually 65%. A generally strong Asian economy. The market is actually still mainly cash driven, even though we see a growth in mortgage-based purchases, yet the ratio of the amount of these loans also on projects is actually still very low along which has a lot lower than national average for Indonesia. Also more along with more institutional funds are entering the Bali market. Resorts along with villas have seen a drop in 1% average per year over the last two years. However, growth in room rates more than covers up for in which. With the growth of This specific year of about 17% overall, Bali needs about 9,000 brand-new rooms every year! There are some issues within the low-end market, especially condotels; they sell rooms for 30 USD along with cannot sustain financially, nor manage to pay ROI as promised to buyers of units. Many of these hotels are built in less favourable locations – bad build, bad design, not the best management – so of course they enter into a ‘cost war’. Certain areas such as Sunset road along with parts of Seminyak may start to reach a peak in land prices as with the restrictions in heights of buildings in Bali, any business concept will struggle to make sense. various other than in which the market will continue to grow all over Bali.
Are there any laws in place in Bali to curb property development?
Yes along with no. through time to time the Indonesian provincial along with central government issues different regulations to control the growth. To curb the item is actually impossible, simply because the economical interest is actually too big, as well as legally difficult to enforce. One also has to realize in which the growth of the Balinese economy is actually less than national average along with has nothing else yet tourism along with property. The last couple of years we have seen a shift in mindset through the government, away through curbing along with more towards very strong zoning regulations, size of land needed for resorts along with commercial concepts, along with in general towards where the market is actually taken. There are massive challenges, in particular infrastructure, water, electricity along with various other essential items. yet I do believe Bali will find its way through This specific.
In many foreign countries, land or property can be purchased by tourists/expatriates. Do you think in which expatriates or overseas customers will ever be able to legally own property here in Indonesia? How do your non-Indonesian customers purchase properties at This specific point?
Foreigners can also legally own property in Indonesia under a set structure. What they cannot own is actually only freehold. First thing is actually to evaluate for what purpose the property is actually purchased as This specific will affect the structure. Secondly, the item’s important to understand in which these regulations are very safe along with there are no restrictions on resale of property to anyone, even back to an Indonesian for a freehold title. Also, Indonesia does not exercise restrictions for resale via tax regulations as many various other countries do. The issue for foreigners looking at buying properties in Indonesia is actually more the perception of the legal system. This specific has taken off to a very wrong path along with ‘custom’ in Bali in which is actually not done in Jakarta along with Surabaya or any various other area along with has more to do with less responsible legal advice.
We hear the brand-new government wants to change the regulations, along with actually they have done This specific before by increasing the first term of Hak Pakai, along with HGB titles. This specific is actually most likely to be what they aim to do. yet This specific will also probably need some revisions of the Indonesian Constitution, as the item is actually here these adjustments have failed to pass before. In general, as any country moves towards a more open market, these regulations will become easier along with more along with more in favour of expatriates.
What’s the most expensive property you’ve ever sold? How much did the item go for?
We have done a few deals over 10 million USD within the Seminyak area with resorts. This specific record I think will not stand long as there is actually an increasing interest through high-end investors along with institutional funds looking towards Bali. We also at This specific point list more along with more resorts as part of our business stream.
Do you plan to expand to areas outside of Bali?
We have spelled out in which we want to be a resort along with tourism-based real estate company. We plan to open a few more offices in upcoming areas of Bali, as well as Lombok along with Flores. We are also considering an office in Jakarta to be able to better follow up with clients within the capital. We may also do some cross-marketing of Australian along with brand-new Zealand properties into the Indonesian market.
Have you noticed any trends within the development of, along with interest in sustainable housing, like houses made of bamboo, or houses with solar panels along with rain water systems already in place?
Yes, This specific is actually more along with more a trend we see on a daily basis, with construction concepts ranging through recycled products to bamboo along with steel. Several businesses focus on This specific as their core business at This specific point. Being also cost effective, the item’s only a matter in which these products become more prominent within the market. Water is actually the main issue along with there are many systems on the market. Hopefully the government issues regulations along with tax benefits to enhance the usage of these systems, as suggested by the tourism minister recently.
What do you think the future has in store for the property industry in Bali?
I predict the item will continue to grow strong along with spread out over larger areas of Bali. the item will continue to move more upmarket, along with towards more eco-friendly developments. the item’s a path we all have seen in various other countries. There are some serious challenges within infrastructure developments, yet I am optimistic the government will soon be up to speed. The main challenge for Bali is actually to preserve its culture along with people, as without the item we are lost; the item is actually the main attraction of Bali.
What is actually the item about the property industry in which you love so much?
the item’s more a love for Bali. To sell property in Bali feels not bad, as you know buyers will benefit with capital gains, ROI, along with lifestyle if bought under the right structure along with right cost; something we guarantee will be the case.
Thanks, Terje. To get in touch, email: terje@raywhiteparadise.com
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Terje Nilsen, Director of Ray White Paradise Property Bali
Terje Nilsen, Director of Ray White Paradise Property Bali