Karim
According to my fresh experience (6 months on the island) and what the 'older' residents told me, life in bali seems to be more and more expensive.For exemple, i rent a house for one year, and now the price increase for 15 %.I often drink an expresso in expat place, it is now 19 000 rps, same as my usual place in Paris ! It was just 14 6 months ago. And when i check the land price.....It is really not about my little person, because i can and have to handle this, but i'm asked myslef how the locals can deal with this ?Just an existancial question !Karim
Fred2
I can buy corn flakes at bingtang supemarket 10,0000rp cheaper:icon_mrgreen: then here in surabaya. Just depends on how you want to live, locals go on the price of rice, it goes up & down only by 5,000rp, still plenty of accomdation at 300,000rp a month so there life style has not changed that much. But just look at the cars on the street now, plenty of big cars now so some people are selling land way above what it is worth. wonder who is buying land at 10x what its worth?????????
ronb
Yes, prices are going up. Land prices around tourist development areas are going up at a fair rate, and this feeds into many business costs. And labour costs are going up. Someone who earns Rp1 juta per month would only have got half that about 5 years ago. This part of the story is good news for locals. But with you example of the cost of an espresso - I think they just charge whatever people will pay and that depends on who their customers are. A coffee at a roadside ABC warung can still be just Rp1,000. So you get this picture of a 2-speed economy with lower prices for locals and higher prices for tourists/expats - but we all knew that.The inflation rate in Indonesia is relatively high (maybe about 8%) - as an example the cost of a new Avanza or Rush has gone up about 30% in 4-5 years. This higher inflation rate is connected with the growth rate of the Indonesian economy which has been about 6% per year for the past 6 years.I think the Balinese are doing OK because the island is realtively wealthy. Other parts of Indoneisa are experiencing the same inflation rate but with less tourism money developing their local economies.
sakumabali
Hi Karim,I've often the impression that the locals have no problem with it at all, like f.e. Pepito Supermarkets is in my opinion one of the most expensive supermarket chain (especially little things like sausage, cheese, bread, fruits & vegetables cost a fortune, Carrefour is MUCH cheaper!), I only buy at Pepito if I need just one / two items or if I'm totally hangover & don't want to drive too far & fecking hungry...the people with the full trolleys inside are always indonesians, today I read that 0.1 % of ALL the combined indonesian bank accounts hold more than 50 % of the total money,for the indos who think the prices for an espresso at lush cafes etc is too expensive they drink copi at the warung / eat nasi campur same as me :icon_biggrin:
gilbert de jong
First...what do you mean with local??in my book there are locals and there are locals...in other words the people who life in a desa, work the land or do any other kind of hard labour..or the people who they work for...both are localshow do the first type of locals handle expensive capucinno?? they don't drink it, they don't even now what it is.how do the first locals handle increasing rentprices?? they don't rent.the second type of local, doesn't really care about if the espresso is 15/20/25 ribu..the second type also doesn't rent.
sakumabali
First...what do you mean with local? (etc)[/QUOTE]Good point!!!
Karim
Local isn't an agressive term. Just the people living here. Of course they don't have all the same condition of life. My owner is living like a bilionair... Anyway, it looks harder for those wich just have 1 millions rps monthly salary. But my point is about the price going up since few months. And quickly !Sorry for my english, it is my third langage.
gilbert de jong
no worries...I for one didn't read it as an 'agressive' term for part of Bali's population..like I said, there are two...well actually 5 kind of locals, the poor as dirt..the poor but get by...middleclass...rich....and filty rich.but you're right..everything is getting more expensive.
Rangi
everywhere in the world is getting more expensive unfortunatly
no.idea
In 1987 I was paying about 800 rupiah for a small Bintang. This was around $1 AUD.In 2012 I am paying a bit under 10,000 rupiah for a small Bintang. This again is very close to $1 AUD.This is not really a sharp increase over 25 years.Many things vary on how you look at them. Two years back (Jan 2010) I was going to transfer a reasonable sum of money to Indonesia from Australia. Simply because I am slack I did not do so. I left it earning less than 5% interest in Australia. I transferred the money during the last week. If I had transferred the money when originally planned I would have got an exchange rate of 7,200. On average the money I transferred during the last week realised a rate of 9450. This is an increase of 31% on my money.The land value around me has not increase by 31% in the last 2 years.
sakumabali
The land value around me has not increase by 31% in the last 2 years.[/QUOTE]:highly_amused:Seriously?I don't know where you live on bali but I highly doubt this....
balibule
:highly_amused:Seriously?I don't know where you live on bali but I highly doubt this....[/QUOTE]Obviously, some land increases faster in price than others. There is land that has increased more than 30% but also less or who knows even devalueated becuase it got turned into a jalur hijau.
no.idea
:highly_amused:Seriously?I don't know where you live on bali but I highly doubt this....[/QUOTE]Sorry I do not under your comment. Maybe you have misread my post. I have simply stated that the land value around me has not increased by 31% in the last two years and you doubt this fact?
sakumabali
I don't know where your place is here, but 30 % increase is not much over 2 years, I've the feeling that the Nusa Dua area alone saw an increase of 30 % over the last two months, nevermind...
gilbert de jong
just wait till the government cuts 3 zero's so 1.000.000 will become 1.000 now then we will see some mayor2 increases...maybe even worse increases then when the euro was introduced in NL :icon_rolleyes:ofcourse, if that will happen..
no.idea
I don't know where your place is here, but 30 % increase is not much over 2 years, I've the feeling that the Nusa Dua area alone saw an increase of 30 % over the last two months, nevermind...[/QUOTE]I am so happy. The land that I am on was valued at $ 1.2 million AUD just on two years ago. Now I have been assured by Sakumbali that a 30% increase in value is a certainty. This is an increase on the land value of more than $360,000 in just 2 years. This is over $3,500 per week.I also have 40 Are of land in Selat which is above Kalibukbuk, now that I know the value of that has increased I am even more excited. Does anyone think that the beachfront property I have in Sulawesi would also be experiencing this surge in value increase?Get real!Someone may have purchased land on the bukit and sold it at a handsome profit. This certainly does not mean that land throughout the whole of Bali has increased in value by over 30%.
hinakos
I really dont get why people want the value of their land to increase??? What do you gain? You gotta buy somewhere else if you sell so there is no gain whatsoever.Its the same kind of thinking that financial institutions and governments encourage which leads to a bubble forming. The govt loves this as they make tax revenue from each financial transaction made related to this. (of course the balinese believe land can only ever go up and up and up, at an ever increasing rate......this is not sustainable and cant last)Wait for the govt to drop the fuel subsidies planned in April/May. (what they tell us now about the poor still being able to buy fuel cheaply after the changes wont last long)Soon inflation will hit the everyday Balinese/Indonesian person, whether they drink fancy espresso coffee or kopi hitam. The price of rice, cement, medicine, timber, electricity etc all go up. So does the price of having a holiday in Bali.When people can no longer afford day day to items (i.e when the govt intoduces major reforms such as dropping the massive fuel subsidies) any many are only hanging on to the gains they expect in land appreciation or investments they have made in similar real estate / tourism based industires, the equation changes.Theres just been massive industry closures in West JAva due to governments attempt to repeal mimimum wage laws also.....I think we can get set for another 25% increase in costs of EVERYTHING this year.For us its no big deal really......but I expect there will be a few fires lit around the place come June/July.
ronb
I really dont get why people want the value of their land to increase??? What do you gain? You gotta buy somewhere else if you sell so there is no gain whatsoever.[/QUOTE]Plan A: put your money in a bank where it earns interest that you live off, but the original sum does not increase. Over time, the inflation rate eats into this, and you get poorer.Plan B: put your money into property where the value will hopefully increase faster than inflation, you live off the rent while the increase in land value makes sure you are not getting poorer with time.In Indonesia, inflation in 2011 was lowish at 4%, but over the last 10 years it has averaged close to 10% per year.
SHoggard
[b]Land prices[/b]After my last expedition a few weeks ago, I do get the feeling that most of the land price rises are being driven by B2B deals (bule to bule) and that prices in the South are mainly speculative based on what the seller hopes to get when they cash-out at some stage in the future without having actually built a damn thing on it... rather than the 'true worth' - how that is calculated in Bali, lord knows.Outside the paradise dream world that's called a [I]bubble[/I] and bubbles have a tendency to pop.So what's happening in the real world that might pop the bubble?[LIST][*]US property values in 20 cities dropped 3.4 percent from October 2010 after decreasing 3.5 percent in the year ended September.... led by a 12 percent drop in Atlanta. [I](Bloomberg)[/I][*]UK values, from a year earlier, fell 1.6 percent in January. The U.K. economy shrank 0.2 percent in the fourth quarter as inflation, rising unemployment and the euro-area debt crisis damped consumer spending - national survey showed that sellers are accepting an average 7.5 percent reduction on asking prices for their properties. The number of sales agreements plunged 14.3 percent this month, after a 0.9 percent drop in December, while the average selling time rose to 10.2 weeks from 10.1 weeks. [I](Bloomberg)[/I][*]It appears 2012 has kicked off the same way 2011 finished with the sky of the Australian property market falling in. [I](Sydney Morning Herald)[/I][*]Singapore, meanwhile, private homes prices have also softened - rising 5.9 per cent in 2011, compared to the 17.6 per cent increase seen in 2010. In the last quarter alone, prices of semi-detached homes dropped 0.6 per cent. Property watchers said private home prices are likely to drop by 10 to 15 per cent this year. [I](Straits Times)[/I][/LIST]And Bali expects to continue with 30% property price growth? The only question in this pass-the-land-parcel game is who gets caught holding the parcel when (not if) the music stops.Why [I]would[/I] the music stop? When the fresh buyers stop coming to market.Why [I]would[/I] that happen? [LIST=1][*]Unemployment - buyers loose their jobs [*]Recession in most of the developed world - buyers loose their shirts [*]Inability to sell whatever property back home (wherever 'home' is) buyers have pots of negative equity [*]Eurozone crash, [*]US banking crisis....386 US banks, savings & thrifts have gone bust since 2008 (the most recent recorded by the WSJ was in Aug 2011) btw there's a neat graphic here: [url=http://graphicsweb.wsj.com/documents/Failed-US-Banks.html]Failed Banks - Wall Street Journal Online[/url][/LIST]etc etc... so my crystal ball tells me that in the 1-2 years there's going to be a lot of overpriced dirt on the market Of course, if the plan is buy the land & live on it, that requires a different perspective.
julias.andre
After my last expedition a few weeks ago, I do get the feeling that most of the land price rises are being driven by B2B deals (bule to bule) and that prices in the South are mainly speculative based on what the seller hopes to get when they cash-out at some stage in the future without having actually built a damn thing on it... rather than the 'true worth' - how that is calculated in Bali, lord knows.Outside the paradise dream world that's called a [I]bubble[/I] and bubbles have a tendency to pop.So what's happening in the real world that might pop the bubble?[LIST][*]US property values in 20 cities dropped 3.4 percent from October 2010 after decreasing 3.5 percent in the year ended September.... led by a 12 percent drop in Atlanta. [I](Bloomberg)[/I][*]UK values, from a year earlier, fell 1.6 percent in January. The U.K. economy shrank 0.2 percent in the fourth quarter as inflation, rising unemployment and the euro-area debt crisis damped consumer spending - national survey showed that sellers are accepting an average 7.5 percent reduction on asking prices for their properties. The number of sales agreements plunged 14.3 percent this month, after a 0.9 percent drop in December, while the average selling time rose to 10.2 weeks from 10.1 weeks. [I](Bloomberg)[/I][*]It appears 2012 has kicked off the same way 2011 finished with the sky of the Australian property market falling in. [I](Sydney Morning Herald)[/I][*]Singapore, meanwhile, private homes prices have also softened - rising 5.9 per cent in 2011, compared to the 17.6 per cent increase seen in 2010. In the last quarter alone, prices of semi-detached homes dropped 0.6 per cent. Property watchers said private home prices are likely to drop by 10 to 15 per cent this year. [I](Straits Times)[/I][/LIST]And Bali expects to continue with 30% property price growth? The only question in this pass-the-land-parcel game is who gets caught holding the parcel when (not if) the music stops.Why [I]would[/I] the music stop? When the fresh buyers stop coming to market.Why [I]would[/I] that happen? [LIST=1][*]Unemployment - buyers loose their jobs [*]Recession in most of the developed world - buyers loose their shirts [*]Inability to sell whatever property back home (wherever 'home' is) buyers have pots of negative equity [*]Eurozone crash, [*]US banking crisis....386 US banks, savings & thrifts have gone bust since 2008 (the most recent recorded by the WSJ was in Aug 2011) btw there's a neat graphic here: [url=http://graphicsweb.wsj.com/documents/Failed-US-Banks.html]Failed Banks - Wall Street Journal Online[/url][/LIST]etc etc... so my crystal ball tells me that in the 1-2 years there's going to be a lot of overpriced dirt on the market Of course, if the plan is buy the land & live on it, that requires a different perspective.[/QUOTE] Good analysis, but indonesia not high capital country not really getting an effect from global crisis.when UE had huge problem and downgrade by Fitch rating etc, indonesia rise to investment grade by Fitch. Where the investors go to put their save haven??
