In a year of uncertainty Lombok has felt like an oasis of calm in turbulent surroundings. For one, the island was made for social distancing. With plenty of empty white sand beaches we have been so grateful to have spent this year in Lombok.
2020 Lombok Property Market Year in Review (and what we predict is ahead)
2020 has been a year of price growth focused across the South Coast of Lombok. With our clients and customers reassessing what is most important to them we have seen the interest in quality property increase as the year has progressed. Read on to hear our take on how the Lombok property market has performed in 2020 and what we believe are the key property market trends for 2021.
Who was our typical buyer in 2020?
This year was dominated by those looking for an affordable second home for remote working and holidays. The low entry level pricing of Lombok appealed to buyers for lifestyle purposes and there is the expectation of strong long term capital growth.
We assisted buyers from 23 different countries this year, with European and Asian based purchasers making up the majority.
Young families were heavily represented along with more than a few planning a retirement in Lombok (including some early ones).
As we look back in years to come, 2020 may be the year Lombok’s property market matured. This year has further shown that Lombok is evolving from a market that was primarily dominated by land speculators to a location where people are developing high end villas and boutique accommodation.
As the trend to remote and flexible working accelerates, Lombok is no longer seen as just a holiday destination, but also a location for permanent living or a genuinely affordable second home.
As we predicted in our yearly review 12 months ago the pockets of Lombok benefiting from infrastructure and private investment have seen prices increase in what feels like the beginning of an upward swing. In short, quality property continues to move ahead of more speculative locations in terms of psm pricing.
Let’s take a look at the market in more detail…
How have prices fared in the Land Market?
Key pockets of South Lombok experienced strong price growth in 2020. The winners were the locations that benefited from surrounding development and infrastructure. For us, the hotspots this year include: Kuta, Are Guling, Serangan Beach and Selong Belanak.
With large ocean view villas under construction around the bay and its close proximity to Kuta and the Airport, Are Guling bay has been a strong performer in 2020. We predict the area is gaining momentum for a strong 2021 as villa and boutique hotel developments come to fruition.
Beachfront hotel openings and further boutique property developments under construction have also driven pricing here. This bay’s growth has also been driven by the new bypass road (completed in 2018) and easy public road access to beachfront sites
A limited supply of quality sites that are tightly held is continuing to drive pricing for villas and land close to this perfect white sand beach. With some new land subdivisions due to come online in early 2021 we will get a clear indication of how much pent up demand there is. If you are interested in sites in Selong Belanak you can register your early interest for new releases here
The commercial and tourism hub of South Lombok. The property market is quickly transitioning from predominately budget accommodation to high-end villa accommodation. An ever-increasing expatriate population are driving demand for sites suitable for private home builds.
For investors the rental yields in Kuta continue to be a standout performer, local and overseas buyers are taking advantage of this. The towns proximity to the MotoGP track (due for completion in mid-2021), new hotels and the International School are all drivers of demand. With a limited supply of greenfield sites we expect central Kuta to be a strong performer into the new year and beyond.
Looking forward to 2021, what do we see as the key property trends?
With land prices on an upward swing and a move away from land speculation we see buyers continuing to focus on sites that are serviced and ready for construction. Smaller sites (under 2,000sqm) close to amenity will be in high demand.
We see completed villas with management in place and a strong rental history becoming more sought after as more quality stock becomes available than has in the past. We expect Lombok to continue to benefit from the trend towards more flexible and remote working arrangements. This is a worldwide trend driving pricing in comparable property markets that is still in it’s early stages with significant upside for early movers.
If you currently own property in Lombok and would like an update on pricing in your area, or you are starting to explore your own purchase don’t hesitate to get in touch for a chat. We look forward to hearing from you and wish you all the best for the year ahead.