Bali Experiences A Rice In Commercial Property Prices

Bali Experiences A Rice In Commercial Property Prices

Thursday, 28 Nov 2024

The results of the Commercial Property Development Survey (PPKom) conducted by Bank Indonesia indicate an increase in commercial property prices, as reflected by the Commercial Property Price Index for Bali Province, which recorded a value of 122.62 in the third quarter of 2024. This represents a year-on-year growth of 9.86% compared to the same quarter in 2023, when the index stood at 111.62.

The rise in property prices is attributed to an increase in rental prices for retail properties and apartments, which grew by 14.61% and 18.24% year-on-year, respectively, compared to the previous quarter's growth rates of 15.09% for retail rentals and 9.71% for apartment rentals. Additionally, rental prices for hotel and office properties also experienced growth, with increases of 9.87% and 5.06% year-on-year, respectively.

The PPKom survey is a quarterly assessment aimed at providing early information regarding the trends in commercial property (excluding residential properties) on a quarterly basis. This serves as a component in forming the composite asset price index to support Bank Indonesia's responsibilities in establishing and implementing monetary policy. Erwin Soeriadimadja, the Head of Bank Indonesia's Representative Office in Bali Province, noted that the increase in commercial property prices is also driven by heightened tourism activity in the third quarter of 2024, coinciding with the peak season period in July and August 2024.

The increasing demand for property in Bali is evident, as reflected in the Property Demand Index, which recorded a growth of 10.45% (YoY) in the third quarter of 2024. Notably, the demand for office rentals surged by 36.43% (YoY), retail rentals by 38.88% (YoY), and hotel accommodations by 6.85% (YoY), as stated by Erwin in a press release on Thursday, November 28, 2024. This rise in property demand aligns with data from the Central Statistics Agency (BPS), which indicates a growth of 1.84% (YoY) in the Gross Regional Domestic Product (GRDP) of Bali's real estate sector during the same quarter.

Conversely, the Commercial Property Supply Index experienced a growth of 3.08% (YoY) compared to the previous quarter's 2.15% (YoY). The increase in supply is primarily observed in the apartment and retail property categories. Erwin further explained that to support the growth of quality properties, Bank Indonesia consistently encourages the distribution of credit or banking financing through the enhancement of macroprudential policies, including the strengthening of the Macroprudential Liquidity Incentive Policy (KLM), which fosters sustainable economic growth, supported by accurate monitoring of property prices, supply, and demand. (putri@insightinnews.com)

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