Editor's note: This interview was originally published in 2013. Bali's property market has appreciated significantly since then, with monthly villa rental yields of 8–12% now achievable in prime locations, and a 2023–2024 boom driven largely by digital nomads and remote workers. The core insights from Dominique Gallmann on navigating the Bali market remain highly relevant.
Established in 2002, Exotiq is much more than a real estate agency in Bali. It is a brand focused on helping people establish a lifestyle in paradise. Dominique Gallmann knows how to do this because he did it himself — settling in Bali in 1993, he founded Exotiq in 2002 and has since built it into one of the island's most respected property and lifestyle companies. We spoke to Dominique about his observations of the Bali property market and why he continues to believe it offers some of the most compelling investment fundamentals in Asia.
The Interview
What are the major changes you have seen in Bali over the past two decades?
Bali has developed so much over the past twenty years. Tourism has increased every year and it has become increasingly popular for people to live or do business here. The infrastructure and communications are now much more sophisticated, which makes it even more attractive for people to live here for extended periods of time. The island has gone from being primarily a backpacker and surfer destination to a genuinely international lifestyle hub, and that evolution has been reflected in property values.
How has the property market changed over that time?
About twenty years ago the first Westerners started building villas for themselves and discovered by accident that there was a profitable villa rental market. The first well-known product in the villa segment was built by an Australian investor with just a couple of houses. Nowadays that development is still a popular and respected property here.
People who built villas for their own personal use soon realised that rental profits were good, and it did not take long for local developers to start selling their own properties and offering to manage them for the new owners to raise capital for future developments. A new market segment was born — and Bali, in many ways, pioneered the villa market that has since been adopted by five-star hotel operators here and around the world.
What type of rental returns can someone expect from a property they purchase in Bali today?
The returns that investors have received on Bali property have been exceptional by international standards. In the early days of the villa market, returns as high as 25% were not unheard of. Today's market is more mature and more competitive, but gross rental yields of 8–12% are still achievable for well-located, professionally managed villas in areas with strong tourist demand — places like Seminyak, Canggu, Ubud, and parts of Bukit. Net yields after management fees, maintenance, and other costs typically run at 6–9%.
The 2023–2024 period has been particularly strong. Record tourist arrivals — Bali welcomed over 5.3 million foreign visitors in 2023 — combined with a surge in demand from digital nomads and remote workers has pushed occupancy rates and villa rental rates to levels that were not anticipated even two years ago. Investors who entered the market in 2019 or 2020, in some cases at distressed post-pandemic prices, have seen exceptional returns.
How have land values appreciated in the region?
Land value appreciation across Bali has been dramatic and sustained. Let me give you a sense of the trajectory. In the early 2000s, prime land in Seminyak could be acquired for a relatively modest sum. By 2013, the same land had appreciated many hundreds of percentage points. In the decade since 2013, the process has continued — with some areas, particularly Canggu, having tripled or quadrupled in value.
Canggu deserves particular mention. In 2013, it was still largely rice fields and a quiet surf beach. Today it is one of the most dynamic areas in Southeast Asia's resort property market — and land prices have risen to reflect that. Buyers who entered Canggu early have seen returns that would be difficult to match in almost any other market on earth.
Whilst not every area of Bali has seen this level of appreciation, and whilst the pace of future growth will inevitably moderate from the rates seen during the island's initial discovery period, annual appreciation of land in well-chosen locations continues to be meaningfully positive.
How much money would I need to enter the market now?
Prices have moved substantially since the early days, and Bali is no longer as accessible as it once was for entry-level buyers. At the bottom of the investable market, you might find a one-bedroom villa in a managed compound in a secondary location from around USD 150,000–200,000 on a leasehold basis. A quality three-bedroom pool villa in a prime Seminyak or Canggu location on a 25-to-30-year leasehold will typically be in the USD 400,000–800,000 range. At the upper end — absolute beachfront, five bedrooms, a full complement of luxury amenities — prices above USD 2–3 million are not unusual.
The entry point matters less than the quality of the location, the lease structure, and the management arrangement. A well-chosen property at a higher price point will typically outperform a poorly chosen one at a bargain price.
What kind of people are choosing to purchase property in Bali?
The expatriate and investor population here is growing. There are significant numbers of Europeans and Australians who have chosen to settle or invest. Local Indonesians remain a very important segment of the market. And increasingly we see buyers from Singapore, Malaysia, Hong Kong, the Middle East, and India — all attracted by both the lifestyle and the investment fundamentals.
Since 2020, a genuinely new buyer type has emerged: the digital nomad or remote worker who initially came to Bali on an extended stay, fell in love with the place, and subsequently decided to invest. This buyer is typically younger than the traditional second-home buyer, is highly mobile, and places enormous value on both lifestyle quality and rental income potential. They are a significant new force in the market.
What advice would you give someone interested in purchasing in Bali?
The risks of investing in Indonesia are actually not as severe as the perception suggests. The political and regulatory environment has improved dramatically in recent times. Leasehold rights, properly structured, are quite secure and cannot easily be challenged. Whilst owning freehold title is not possible for a foreigner, the leasehold options — now extendable to 80 years in aggregate under updated provisions — offer a meaningful investment horizon.
My practical advice: look very carefully at the track record of the developer or operator you are working with. Understand what villas they have produced over time and get realistic information on how they have performed. A good independent agent who knows the operator's history is invaluable here. Secondly, make sure all the paperwork is correct — have it reviewed by an independent notary and an independent Indonesian lawyer, not the developer's counsel. And if you are intending to rent the property, verify from the outset that the correct permits are in place for short-term tourist accommodation.
What advice would you give a new property owner looking at renting out their investment?
The most important thing is to ensure that you have the specific permits required to actually rent out your property legally. This is a step that is sometimes overlooked in the excitement of a purchase, and it can cause real problems later. Rental income from a Bali property is taxable in Indonesia, and if you are remitting income to another country, there are withholding tax implications to understand. A good local accountant is essential.
If you are hiring a management company, read the fine print very carefully. Management fees, marketing costs, maintenance retainers, and other charges can eat meaningfully into your net yield if you do not understand the economics in advance. Ask for a clear, itemised fee schedule and for references from other properties under their management.
What do you see as the differences between the Bali and Thailand (Phuket) markets?
The two markets have traditionally been in a degree of competition with each other, but they serve somewhat different buyer profiles. Thailand, and Phuket in particular, has better medical infrastructure and a more established legal framework for property management. Bali has a more distinctive cultural character and — in my view — a more creative and vibrant lifestyle ecosystem. The type of properties available differs too: in Thailand, developments tend to be larger and more resort-like; in Bali, they remain more intimate and individual.
Both markets have recovered strongly from the pandemic. The buyer who is right for Phuket is not always the same buyer who is right for Bali. The best thing is to spend time in both before deciding.