Property Bloom

by 8 Degrees of Latitude

HECTOR’S DIARY

His regular diet of worms and other non-religious experiences

HectorR

The Cage, Bali

Apr. 8, 2017

OK, so in Bali a property boom that will surely be unregulated – if it eventuates anywhere beyond the hype files of realtors – has about as much of a helpful impact as an algal bloom in fragile coral-fringed ocean waters, but we’ll try to be positive. Changes to Indonesia’s property laws that give foreign buyers leasehold rights for 80 years and access to local bank finance are good. They’re fair, for a start, and take account of the market that exists for such deals.

It’s true that Bali’s property market is unlike any other in the country – even Jakarta’s, where it’s underpinned by solidly productive industrial and commercial investment and a growing real economy – but at the same time, practically speaking, there’d be no property boom in Bali were it not for tourism, on which the investment sector of the economy is irrevocably based. So it also makes sense, of a sort, to facilitate private domestic and foreign investment in that job-creating area, as long as this doesn’t squeeze any more myopic local greed out of the souring Balinese lemon. That’s a long-shot option, of course.

Invitations to hop aboard the latest bus to paradise are popping up everywhere. One reached us the other day from Bali & World News and Views, an online thing that is run by Lawrence Bellefontaine, of PT. Bali. He has organised two free seminars in Sanur on Apr. 13 and Apr. 15 at which, he says, he will reveal the wealth to come to anyone who invests in what passes here for bricks and mortar.

There are certain fundamentals in the Bali property market that realtors of all stripes seek to explain away, if they cannot hide them. There’s been, so it is said, a “correction” in the market lately. Real estate is subject to the same range of cyclical factors as any other economic sector, so on the face of it that’s a fair statement.

It overlooks an essential point, however: that markets only work – indeed can only operate – when sellers meet buyers’ expectations. There’s a great deal of property in Bali that has been on the market for a very long time, because sellers put prices on their property that are more than buyers will pay. That’s the correction we need to have. This concept doesn’t suit sellers, of course, but that’s the way the crumbling cookie has always turned to dust.

It doesn’t suit realtors, either. They want to make a profit, and of course they should, for otherwise there’s very little point in being in business. But they’re increasingly unlikely to do so, except at the opportunistic margins, in the unregulated building environment here. A prime villa with sea views – just for example – becomes sub-prime the moment someone builds out that view. That they’re more than likely to do this very soon and compound their offence by building on your wall as well, ignoring regulated requirements for space between properties, makes it worse.

The key to proper property and development management is fair regulation that is enforced. Neither of these factors is present in Bali.

Gut Feeling

FACEBOOK’S capacity for instantly advising you of where friends are and their circumstances of the moment is of course very useful. Some of those old enough to remember the days when if you sailed away from the homeland you were never heard from again are still trying to come to grips with the fact that, these days, there’s nowhere to hide.

A note posted by one of our more peripatetic pals the other day reminded us of this modern benefit. “Breakfast in Bangkok”, his Facebook proclaimed. At the time, we hadn’t had the second morning cup of coffee before which persons possessing natural caution do not approach us. “As long as it’s not dinner in Dhaka, you should be right,” we replied.

Lala Land

IT’S not just this side of the Arafura Sea that you find bureaucratic nonsense under foot wherever you turn. A friend who has recently moved back to Australia from Bali relates a sorry tale of Aussie-style bureaucracy run amok. Having heard the tale in all its risible detail, we shall never again complain about Indonesian rules. Well, OK, we might, but you know what we mean.

Apparently, if you’re applying for a driver’s licence there, and not just renewing one, you must now provide details of your first Australian licence. It’s not clear why that should be the case. Surely the last valid licence would be sufficient.

Difficulties arise, in the Australian way, because state authorities issue driver’s licences and databases do not necessarily match and may in fact not be accurate.

It certainly prompts the thought that even if you are away from Australia for an extended period of time, you should try to renew your driver’s licence on expiry. If you have an address in Australia, that’s simple enough, though of course you need to be there to renew.

On a related matter, new banking rules in Australia mean that even as a long-established customer with a local address, a registered signature, and all the other bumf that you need on file these days, including a tax file number, you cannot now establish, say, a new term deposit (or even add to one) without fronting up at the bank to sign in person.

No doubt the fat controllers fear that retired folk on reduced incomes trying to scratch an extra measly sou out of catatonic depositor interest rates are actually undercover agents of the global money laundering conspiracy.

Barker Beach

We spent a pleasant hour or so the other day at Karang Beach in Sanur, where locals and foreigners alike look after the beach dogs as if they are family. It was lovely to see. They’re friendly beings (the dogs we mean; the people are nice too) and appreciate the food and contact they get. Most are still statistically underweight and have health problems, but they’re better than many, and that’s fabulous.

Sanur benefits from a strong sense of community and the extensive canine health programs that local banjars have embraced. Among other things it has eliminated rabies as threat in the area. They’ve done this via efforts by local and overseas not-for-profit animal welfare agencies, and an innovative project that Udayana University is running as a result. It’s good to see.

Just Joshing

ALL Fools’ Day has now passed again for the year. We decided not to post a diary on Apr. 1 because of this factor, even though, by many marks, it’s always all-fools’ day around here, as well as around the globe.

The origins of April Fools are obscure, but whether it stems from confusion in 16th century France over the new Gregorian calendar which moved New Year’s Day to Jan. 1, from ancient Roman and Greek spring rites, or even from Holi, the Indian Hindu festival, it’s a day to believe even less than ever of what you might read and see.

HectorR

Hector writes a monthly diary in the Bali Advertiser. The next appears on Apr. 26.