Sat, 03 Jun 2006
From:
Bali dream homes: resiliently ever-rising
By Vaudine England International Herald Tribune

FRIDAY, JUNE 2, 2006
SEMINYAK, Indonesia Although hotel reservations in Bali plummeted - at least temporarily - after the terrorist bombings of October 2002 and October 2005, investments in dream homes have never stopped soaring.

"Bali is so international and so unique, the demand will always be here," enthused Nicholas Heaney, a vice president with ABN Amro Bank in Singapore, who was in Bali to check his million-dollar villa that is being built overlooking pristine Jimbaran Bay.

"It doesn't matter what the disturbances are in between, Bali will always be Bali."

A visit to Heaney's site at Temple Hill indicates that a million dollars can buy a lot of view and space. Endless blue sea and sky are the setting for hundreds of square meters of space over several floors, as well as areas that eventually will accommodate pools and water features, patios and more.

This is the second time he has put his money where his mouth is. His first villa purchase was in June 2002, also at Jimbaran, and he resold it before it was completed for a 77 percent return, he said.

In Bali, the greatest capital appreciation generally comes between the plan and a villa's completion, said Nils Wetterlind of Tropical Homes, a high- end development agency, who has shepherded Heaney's transactions. As such purchases are made in cash - mortgages are not available - investors who can afford to front the initial cost stand to make a tidy profit.

"After the first bombs, nobody bought and nobody sold, so prices didn't go down," Wetterlind said. "We just didn't do anything for eight months."

Jemaah Islamiyah, a Southeast Asian terrorist group sometimes linked to Al Qaeda, is blamed for both attacks.

Yet, "land prices have increased five to 10 times in good areas in the last five years," Wetterlind said. Pointing at a tip of land visible from Jimbaran Bay, Wetterlind said its previous price of $700,000 per hectare rose to $4 million a hectare in a recent sale.

Such extraordinary numbers carry risks, and many real estate specialists warn against diving into a villa purchase without proper research.

In the growing areas of Seminyak, Krobokan and Umalas, roads are lined with real estate signs promising every tropical fantasy under the sun, but some of the offers are fraudulent. Developers are selling villas off-plan even though they don't own the land; others are offering 25-year leaseholds that, despite their assurances to the contrary, cannot be renewed. (Foreigners cannot buy land, so either they must be content with leases or, to buy something outright, they have to work through local frontmen.)

"Many people don't know who they are dealing with through a Web site and there should now be more regulation," said Angus MacLachlan, founder of Exotiq Real Estate, a property brokerage based in Bali and Phuket that does not get involved in development projects to avoid conflicts of interest.

"A few of us are thinking of having some sort of association of foreign property brokers, which could restrict membership according to certain standards and personal recommendations," MacLachlan said.

With the proper arrangements, however, buyers can choose homes like Villa Tengit, a few minutes walk from the beach at Seminyak. The 650- square-meter, or 6,996-square-foot, villa stands on 1,400 square meters of land, with a 17-meter-long pool. It has three large bedrooms, a study and Philippe Starck-designed bathrooms - all for $1.8 million.

MacLachlan just closed a $900,000 deal for two villas with 2,600 square meters of land in the inland Umalas district, where new development is being spurred by an equestrian center based there. Another villa in Umalas with five bedrooms and a tennis court is going for $1.3 million, he said.

How little these new villas reflect life in Bali is much discussed by locals.

Current fashion decrees a Zen-like approach to interior design, with stark white walls and uncluttered surfaces; Balinese life, with its profusion of foliage, open communal compounds and atmosphere of noisy chaos, is kept well outside the gates.

"It starts with the telecom's buzzer on the door, which is unheard of in Bali, where homes leave doors open and have no back fence," said Made Wijaya, an Australian who was born Michael White. Over the last decades he has designed tropical gardens for most of Bali's top properties, and undertaken projects elsewhere, including India and Singapore.

"I am proudly post-Zen; I do full- blown Bali baroque," Wijaya said. "But the fashion is birdless, treeless. It has to have three bedrooms, a plunge pool and so many running meters of horsehair plant, it's making nature look manmade. The human touch is lost.

"These places seem made for people who might otherwise be in Ibiza, but they're coming here for available glamour and cheap labor."

Wijaya recently worked on an unusual - for Bali, anyway - combination of condominiums and hotel, a $19 million project developed by PT Metafora International of Jakarta.

Four structures, each just tall enough to top a palm tree, house private residences. The apartments in six other buildings can be used by their owners for three weeks a year. The rest of the time Novotel, one of the Accor hotel brands, rents them as hotel suites.

The project, Nusa Dua Golf Resort, gives foreigners a simple way to acquire a property. It offers leaseholds that are valid until 2051, with the possibility of 50-year extensions and inheritance rights. Also, 40 percent of the rental income is guaranteed for five years.

Work began in April 2005 and it is now 70 percent sold, with prices ranging from $190,000 to $400,000.

The resort offers convenience alongside investment value, said Stanley Handawi, president director of PT Metafora. "You don't need to bother with maintenance or packing, everything is clear and transparent," he said.


SEMINYAK, Indonesia Although hotel reservations in Bali plummeted - at least temporarily - after the terrorist bombings of October 2002 and October 2005, investments in dream homes have never stopped soaring.

"Bali is so international and so unique, the demand will always be here," enthused Nicholas Heaney, a vice president with ABN Amro Bank in Singapore, who was in Bali to check his million-dollar villa that is being built overlooking pristine Jimbaran Bay.

"It doesn't matter what the disturbances are in between, Bali will always be Bali."

A visit to Heaney's site at Temple Hill indicates that a million dollars can buy a lot of view and space. Endless blue sea and sky are the setting for hundreds of square meters of space over several floors, as well as areas that eventually will accommodate pools and water features, patios and more.

This is the second time he has put his money where his mouth is. His first villa purchase was in June 2002, also at Jimbaran, and he resold it before it was completed for a 77 percent return, he said.

In Bali, the greatest capital appreciation generally comes between the plan and a villa's completion, said Nils Wetterlind of Tropical Homes, a high- end development agency, who has shepherded Heaney's transactions. As such purchases are made in cash - mortgages are not available - investors who can afford to front the initial cost stand to make a tidy profit.

"After the first bombs, nobody bought and nobody sold, so prices didn't go down," Wetterlind said. "We just didn't do anything for eight months."

Jemaah Islamiyah, a Southeast Asian terrorist group sometimes linked to Al Qaeda, is blamed for both attacks.

Yet, "land prices have increased five to 10 times in good areas in the last five years," Wetterlind said. Pointing at a tip of land visible from Jimbaran Bay, Wetterlind said its previous price of $700,000 per hectare rose to $4 million a hectare in a recent sale.

Such extraordinary numbers carry risks, and many real estate specialists warn against diving into a villa purchase without proper research.

In the growing areas of Seminyak, Krobokan and Umalas, roads are lined with real estate signs promising every tropical fantasy under the sun, but some of the offers are fraudulent. Developers are selling villas off-plan even though they don't own the land; others are offering 25-year leaseholds that, despite their assurances to the contrary, cannot be renewed. (Foreigners cannot buy land, so either they must be content with leases or, to buy something outright, they have to work through local frontmen.)

"Many people don't know who they are dealing with through a Web site and there should now be more regulation," said Angus MacLachlan, founder of Exotiq Real Estate, a property brokerage based in Bali and Phuket that does not get involved in development projects to avoid conflicts of interest.

"A few of us are thinking of having some sort of association of foreign property brokers, which could restrict membership according to certain standards and personal recommendations," MacLachlan said.

With the proper arrangements, however, buyers can choose homes like Villa Tengit, a few minutes walk from the beach at Seminyak. The 650- square-meter, or 6,996-square-foot, villa stands on 1,400 square meters of land, with a 17-meter-long pool. It has three large bedrooms, a study and Philippe Starck-designed bathrooms - all for $1.8 million.

MacLachlan just closed a $900,000 deal for two villas with 2,600 square meters of land in the inland Umalas district, where new development is being spurred by an equestrian center based there. Another villa in Umalas with five bedrooms and a tennis court is going for $1.3 million, he said.

How little these new villas reflect life in Bali is much discussed by locals.

Current fashion decrees a Zen-like approach to interior design, with stark white walls and uncluttered surfaces; Balinese life, with its profusion of foliage, open communal compounds and atmosphere of noisy chaos, is kept well outside the gates.

"It starts with the telecom's buzzer on the door, which is unheard of in Bali, where homes leave doors open and have no back fence," said Made Wijaya, an Australian who was born Michael White. Over the last decades he has designed tropical gardens for most of Bali's top properties, and undertaken projects elsewhere, including India and Singapore.

"I am proudly post-Zen; I do full- blown Bali baroque," Wijaya said. "But the fashion is birdless, treeless. It has to have three bedrooms, a plunge pool and so many running meters of horsehair plant, it's making nature look manmade. The human touch is lost.

"These places seem made for people who might otherwise be in Ibiza, but they're coming here for available glamour and cheap labor."

Wijaya recently worked on an unusual - for Bali, anyway - combination of condominiums and hotel, a $19 million project developed by PT Metafora International of Jakarta.

Four structures, each just tall enough to top a palm tree, house private residences. The apartments in six other buildings can be used by their owners for three weeks a year. The rest of the time Novotel, one of the Accor hotel brands, rents them as hotel suites.

The project, Nusa Dua Golf Resort, gives foreigners a simple way to acquire a property. It offers leaseholds that are valid until 2051, with the possibility of 50-year extensions and inheritance rights. Also, 40 percent of the rental income is guaranteed for five years.

Work began in April 2005 and it is now 70 percent sold, with prices ranging from $190,000 to $400,000.

The resort offers convenience alongside investment value, said Stanley Handawi, president director of PT Metafora. "You don't need to bother with maintenance or packing, everything is clear and transparent," he said.



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