Business News

PROPERTY IS STILL PROFITABLE

Date: Tuesday May, 19 2009 08:49

The global economic crisis that we are now experiencing has its root beginning with the credit crunch in the US as far as back as 2004. Between 2004 and 2006 US Interest rate increased by 4, 35% from 1% to 5, 35%. This triggered a slowdown in the housing market. Homeowners in US those who had been sold mortgages that they could barely afford at the 1% interest rate began to default on their payment as the rate increased. This resulted in repossessions and ripple effect in the financial sectors throughout the world, as many of these mortgages had been repackaged and sold on to non-US financial institutions.[1]

During the crisis, property investment seems to be uninteresting, but not in Bali. Based SWA magazine research, it is estimated that during 2008, capitalization of property in Bali worth’s 3-7 trillion rupiahs, at least 711 property projects have been built in Bali by local and foreign investors.

Some developers from US, Netherland, Australia and Singapore such as Peter Studer and Outtriger Enterprises Group are investing their money in property in Bali. Not only foreign investors, local investors are also triggered to invest in property in Bali. Property investment in Bali is yet really profitable. Research found that property’s price raised 25%-30% every year. The price of Premium property in Bali is even more expensive than in Jakarta. But the high price is only for villa, apartment, or condominium hotel.

The need of tourism is the forms of background of business property in Bali. The need of property in tourism industry is related to residential and property related to Business Meeting, Incentive, Convention, And Exhibition (MICE).

Property investment in Bali is yet profitable, but investors must consider its legal aspect, either regarding legal status of the land or Bali space and zone arrangement plan (RTRW Bali). Misunderstanding about the legal aspect of the investment might cause replacement.[Des]

 

 

 



       [1] R.A. Retno Murti, Global Economic Crisis: Impact And Responses In Asia.

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