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News and Views

Notes from Int'l Herald Tribune Story
Unlike many companies dealing with Bali Property, our company has been exceptionally busy, handling many new seller's and buyer's enquiries and requests. We feel strong agreement with the outlook as presented in a recent story in the International Herald Tribune (IHT, online) which carried the title "Bali's cash property market keeps prices up". KEY POINT about the story: The story carried the typical bias of communicating mostly about foreigners in Bali who purchase apartments, homes and villas. This strong component of property transactions will seldom be able to achieve financing for their purchase, although we keep hearing rumors that this situation may conditionally improve in the near term. We feel the story is correct that there is a significant "cash nature" to the our property marketplace. Thus when, in many property markets around the world, the banks and other stressed financial institutions have to foreclose on properties and offer them back into the market - sometimes at a lower price, that is just NOT happening in Bali. It would be our assessment that with very few exceptions, property prices are holding steady, or in some cases may be increasing slightly in those popular areas where the underlying land price has trended upward for many years. The story from IHT quotes some industry luminaries, such as Mr Wetterlind from Tropical Homes and Gallmann of Exotiq as saying you can negotiate, but typically the properties they mention are those with asking prices above USD 1 million. Our experience is that those properties will typically allow some negotiation. BUT if our client/seller is already offering a nice beachfront villa for only USD 439,000 or ocean-side villa for only USD 355,000 then there is not a lot of room to negotiate. Mr Wetterlinid says transactions have "ground to a halt" but that has not be our experience at all. He also compares this market to that experienced after the 2002 bombing in Bali - and we cannot find any evidence of that reaction. In fact, the Bali tourist market is staying buoyant, and the international arrivals for the first quarter of this year have set a record as being an all-time high! And typically that is a good sign for Bali's property interest levels. Mr Gallman says "in uncertain times, you must own your own land and house" and of course we agree with this concept. He also said that in the past, his company had backed Phuket, and you can see that most of the promoted properties on their web site are still from Phuket. But the instability of government leadership, and growing militancy of protestors in Thailand have done a lot to make Bali seem even more safe, and stable and sane. This should bode well for allowing more Asian to prioritize their purchase toward Bali rather than Thailand. Mr Gallmann also mentions the returns on villas used to be 20 to 25% - but we are not aware of owners who are that greedy. In Sanur we tell buyers to target for 6 to 8% returns (on annual rentals) plus gains on the asset values of their property. If you can return a cash value of 10% or higher, you are very lucky indeed! Also, Mr Tuck of Paradise Properties is quoted as saying the east of Bali is growing in appeal as the "genuine Bali". We agree with this, and the Sunrise Coast from Sanur out toward Candi Dasa has been our favorite neighborhood to find sellers, since the day we arrived in Bali and set up our business more than 5 years ago. Check out some of our offerings in this area by using the link below. The article is worth reviewing, as it also mentions some of the options for foreigner "ownership", and suggests that some people are securing 25 year leases. We would not recommend that short a lease term, and almost all our sellers are offering at least 30 years title holding, and in many cases 50 years or up to 90 years can be achieved.

 News  Gains against terrorism    No. 5       16-Jun-07
Police Capture Indonesias most wanted Terrorist Leader - Reuters Ap By Mark Forbes and Daniel Flitton
The most wanted criminal in Indonesia was captured by Police. He was known as the teacher for other militants. The story mentions details of the capture and subsequent follow-ups gained from information found at the arrest loccation. This means two of the top militants, both trained in Afghanistan with Al Quaeda, have suffered a big loss.
Terrorism arrest. Reuters Ap By Mark Forbes and Daniel Flitton For More: By Reuters news - www.reuters.com

 News  Visitors Situation viz-a-viz Terrorism    No. 4       12-Jun-07
One reporter suggesting that visiting Bali is a good idea.
Mr Day appreciates Bali charms in spite of the US governments travel warning. He appreciates many of the beauties of the tropical resort and finds a generous US Dollar exchange rate and an overwhelming number of shops and vendors. He enjoyed seeing only part of a traditional Balinese storytelling dance and left wanting to see more. He ends with I look forward to the pleasure of returning.
"Terrorism fears shouldn't prevent Bali visit" By Dan Day of McClatchy Newspapers For More: http://www.ohio.com/mld/beaconjournal/living/17330874.htm

 News  Bali property future.    No. 3       08-Jun-07
Will Bali properties rise and compete with places like Phuket?
Bali has recently become one of Asia's top two destinations for investing in resort property. The new wave being seen is fostered by the national and Bali provencial governments, meanwhile Thailand's post-coup government has slowed Phuket down. The article explains the foreign property investment situation and new helpful initiatives from the national government. It is also mentioned that for the first time in Bali, property mortgage loans are coming available, call us for details. Ths story also mentions hot geographical areas, and the fact that for now Bali is 30 to 40% cheaper than Phuket. It is said that the bombings never really slowed the wealthy investors from coming to Bali to purchase choice properties. Over time, it seems Bali will see a wave of new investments and value increases as a growing trend.
Property Analysis of pricing for Bali compared to Phuket, Thailand. From the Property-Report.com By Terry Blackburn For More: http://www.property-report.com/aprarchives.php?id=573&date=070607

  F A Q's

   Sale or Lease - Differences    No. 7       18-Jun-09
There is some confusion, some properties are for sale, but it means for lease with a lease contract for several years.
On our web site, a LEASE is offered for those properties that can be taken for a short-term, typically for 12 to 36 months. I am sure you are aware that foreigners cannot OWN, freehold property. So to advertise on our site that these are freehold would also not be precisely true. Also in neighborhoods like Sanur, most properties are SOLD to foreigners with a long-term (more than 3 years lease) contract of ownership - with a typical period of lease of 20 years or more. If we, and all agents in Sanur started saying those properties are not for sale, then there simply would not be very much that is for sale in Sanur. Additionally, quite often the original leases can be extended by 20, or 30, or more years, so effectively the SALE can be expected to endure beyond the life of the buyer, so in many cases these properties will be sellable by the first owner at some future date. So thanks for your advice, but we have checked our practices with certain friends of ours who have lived for decades in this country, and they are comfortable with our current practices.

   Negotiating Prices    No. 2       08-Jul-07
Are the prices shown on the web site still negotiable.
We try our best to negotiate attractive pricing from our sellers, and in some cases, the seller has gone as low as they possibly can. But in many cases a buyer - especially one who loves negotiating - can still improve the prices seen on our site. It never hurts to try.

   Foreign Ownership     No. 1       07-Jul-07
Can Foreigners own Bali Property
Can this be done in Bali? This question always comes up and the answer is yes and no and changing. What is changing are the Foreign Investment laws. The new law passes on 29 March 2007 makes it EASIER and MORE SECURE for foreigners to hold property under very long leaseholds. Still this new law improves the situation a lot. So foreigners can exercise a have and hold on their own property but full dominion must have an Indonesian national. Lawyers and Notaris in Bali can help futher with this question. Contact us for details. See the link provided below for more information, although it only speaks in general terms, does NOT mention the new (Passed in March 2007) laws, and indicates terms for Java that are different than the common practies in Bali. In short - it is a primer, and more research should be done before acquiring property in Bali. For a good analysis of the Phuket comparison, see the Headline - Bali's New Wave in the News section.
Jakarta Based, multi-purposed Expat Guide For More: http://www.expat.or.id/info/ownershiprights.html

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