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Real Estate in Bali – #4 Overbuilding

Posted by Andrzej Barski on 24th August 2017
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 Bali rice fields

This is the fourth in a series of six posts that looks at issues raised a year ago by Terje H. Nilsen, co-owner of Seven Stones Indonesia, in a blog entitled “What’s Wrong With Real Estate in Bali?”

The fourth issue we’re looking at today is about Overbuilding.

What Terje said last year was that many areas are already massively overbuilt. This is a sad fact of life, which he connected to an issue around the sticky subject of zoning, or more precisely the even stickier problem of not enforcing zoning regulations because that turns green zones concrete grey and water catchment areas into flooded highways.

He also noted that this all began to change from 2009-13 when various government departments began doing what they were supposed to be doing and enforced stricter zoning policies.

But has it been enough?

Has this awareness of zones and the need to keep certain areas ‘green’ and free of development actually been maintained?

What has been the driving force behind this?

Is it a sign of things to come?

“The general enforcement of zoning regulations is much better now than it has been before,” observes Terje. “Unfortunately, however, that doesn’t really help or impact areas that have already been overbuilt, like Seminyak, for example. But there’s hope for places further out. Places like Canggu and the Bukit where green belt seem to actually mean green belt.”

We all know this is good news and we hope it continues. We can all see other ‘zoning’ and ‘environmentally impactful’ sore points are being addressed and policy is being enforced: things like IMB’s, which are connected to zoning because of usage (residential, commercial and tourism for example) as well as road, river and beach set-backs because these are vital for the natural balance of a very delicate eco-system.

“But let’s not forget there are two sides to this problem,” says Terje. “We tend to focus on the corrupt government official side and turn blind eyes to the unscrupulous developers and home-owners who know they’re breaking the law and go ahead to bribe their way out of compliance anyway.”

We’re 100% behind that! They’re as much to blame as anyone else and hopefully they’ll also get to read this blog and understand they too have to stop destroying the island for the sake of their bank accounts or a beautiful view.

Terje raises another important consideration. “One aspect that still seems to be going on,” he says “is that local residents of an area ‘don’t seem to need’ an IMB and can build whatever they want wherever they want so long as the Banjar are OK with it. This, I believe needs to be the next step for Bali. The local government needs to ensure its own people also follow the law as this creates a loophole for both foreigners and Indonesians from other islands to use local names to run and operate business not in accordance with zoning regulations. This is what we’re seeing with many operations in emerging areas such as Canggu, and the Bukit.”

The first big test is going to be next year, in 2018, when Bali has it’s regular five-year review of its different areas and zones. And it’s also the year for governor elections. Let’s hope the next governor takes even firmer action to move forward with addressing these issues.

Many thanks for your time Terje and I look forward to posting the fifth instalment of our series on Market Forces in Bali Real Estate.

Andy writes on a variety of topics related to property, real estate, the customer experience, mindset training and local/international trends for Seven Stones Indonesia. You can read some of his blogs here.

Seven Stones Indonesia is a property company headquartered in Bali, Indonesia, with a mission to help people who are interested in buying and selling residential and commercial real estate.

If you’re thinking about property, ROI, capital gains or lifestyle investments in Bali, Jakarta, Surabaya, and Indonesian’s Eastern Islands and need some friendly advice and guidance then why not email or check out Seven Stones Website | Seven Stones Linkedin | Seven Stones Facebook


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