Beyond Bali: Why Investors Should Look to Lombok’s Emerging Luxury Markets

Lombok, island neighbour to Bali, has become a focus of attention for a growing number of those on the lookout for a luxury lifestyle property opportunity in Indonesia. Like Bali, the island has a lot to offer to holiday makers. However it hasn't yet been developed as much by tourists. The unveiling of the Sira Beach Golf and Country Club together with the HOUSE Sira Lombok resort has shown Lombok to be increasingly popular as a destination, offering a combination of natural beauty and luxury living facilities.

Lombok is an alternative to Bali which continues to have a crowded and heavily regulated property market. Located just a short flight or boat journey from Bali, Lombok boasts similar tropical charm but less over-development and more sophisticated infrastructure. This brings fresh opportunities for buyers who are purchasing a property for the first time, remote workers and people who earn their living through the internet, and property investors.

Thailand's Sira Beach Golf & Country Club is a notable new international golf destination. Designed by a team of accomplished architects, the 18-hole championship course boasts panoramic views of the coast line, the Gili Islands and majestic Mount Rinjani. In this area, this facility is a unique luxury, combining leisure pursuits with sports and being in touch with nature. Located near the HOUSE Sira Lombok resort are well-appointed rooms averaging 35 square metres in size. These rooms are perfect for people on weekend getaways, golfers or corporate groups requiring a retreat.

What does this mean for property buyers? The development itself will be a resort, the launch of which will spur the growth of luxury tourism facilities in the area, generating demand for villas, serviced apartments and condominiums, many of which are currently priced lower than the Balinese average. The freehold villas in Lombok are available from around USD150,000 for smaller pieces of land, and villas are available from USD250,000. In contrast to Bali's Uluwatu and Canggu locations, property prices begin at more than $500,000.

In Indonesia, Lombok and Bali included, the choice of legal form for property acquisition is the Hak Sewa leasehold. The leasehold terms generally are twenty-five years in length and are renewable. It is essential to ensure that all necessary IMB (building permits) and PBG (building use permits) have been correctly obtained in order to protect future investment and to safeguard resale value.

Those who will gain the most from Lombok are likely to be digital nomads and retirees. This is due to the island's quieter atmosphere, which is also less congested than other islands, along with its growing internet infrastructure and the island's closeness to nature. While Bali has seen higher resort occupancy rates of 70-80%, Lombok, its lesser-known island neighbour, is attracting increasing attention from investors seeking mid to long-term rental income or villa stays. The current occupancy rate for upscale resorts in Lombok is 60-70%. Lombok has less bustling surroundings but this comes at the cost of less accessible healthcare and education. Both are improving however these are still limited compared to Bali.

While Lombok is generally a safer destination, there are a few issues to be aware of. These include the lower key tourist numbers and some infrastructure that hasn't yet been fully developed in the more outlying areas. There are signs that the government is keen on promoting luxury tourism and real estate as evidenced by the development of Sira Beach Golf & Country Club. It is advisable for buyers to carefully consider the quality of the management, the clarity of the title and market trends.

Practical takeaways for buyers and investors:

• For those with a budget of USD 250,000 to USD 350,000, Lombok offers luxury villa land which has a substantial area and is ideal for an upgrade in lifestyle or a mid-tier investment.
• When investing in a leasehold property in Lombok, model the lease renewal costs in your cash flow forecasts.
• Lombok offers a perfect blend of tranquility and luxury, catering to the needs of digital nomads and retirees who wish to stay in luxury with a peaceful setting.
• When buying property, ensure that any deeds or titles are legitimate; this will help prevent complications with ownership. Consider using a local notary to make the process easier.

Lombok offers the opportunity for a new luxury destination that parallels the charm of Bali, providing possibilities for investors and purchasers who are looking for a fresh alternative. Bali's existing appeal is complemented by Lombok's rising luxury status, which in turn offers growth possibilities for different kinds of buyers and investors seeking to avoid over-touristed areas. At this moment, individuals who stay informed and remain diligent might find it to be a good time to explore the region beyond Bali, and consider Indonesia's other island destinations as a potential vacation location.