- by Ai Samaytuha Maryam
- 25 August 2026
Bali’s primary property market is currently under the spotlight, not only because house prices continue to rise. Behind these price increases, there are several contributing factors, including construction costs, land prices, labor costs, and licensing expenses.
Interestingly, demand for property in Bali remains strong despite the various challenges faced by developers. So, what is actually happening, and what does it mean for those of you who are looking to buy or invest?
According to data from Bank Indonesia, residential property prices in Bali’s primary property market continued to show an upward trend in 2026. The Residential Property Price Index (IHPR) grew by 1.02% year-on-year (yoy) in the second quarter of 2026.
This figure was higher than the growth recorded in the first quarter of 2026, which stood at 0.87% yoy. So, although the increase cannot be considered extreme, the movement is still worth paying attention to, especially for those of you who are looking for a house or new property in Bali.
Price increases have not occurred evenly across all types of properties. Medium-sized properties, with building areas ranging from around 36 to 70 square meters, recorded a price increase of 1.52% yoy. Meanwhile, properties with building areas of more than 70 square meters increased by around 0.82% yoy. This difference shows that each property segment has its own market dynamics.
According to Bank Indonesia, rising construction costs are one of the main factors driving higher house prices in Bali. Increasing production costs have encouraged developers to adjust their selling prices.
As many as 81.3% of respondents in the survey identified rising building material prices as the main factor. In addition, 46.9% of respondents also pointed to increasing labor costs. And that’s not all. Licensing costs, fuel prices, as well as the addition of housing facilities and social facilities are also putting pressure on property prices.
Rising prices do not automatically mean that market conditions have become easier for developers. In fact, developers in Bali are still facing several challenges when selling primary residential properties.
One of the most common obstacles is the high interest rate on Home Ownership Loans (KPR). When borrowing costs become too burdensome, potential buyers may decide to postpone their home purchase.
Bali has strong appeal for both residential purposes and property investment. However, the amount of available land certainly cannot increase indefinitely. Limited land availability makes land prices an important factor in determining property prices.
On top of that, buyers also need to consider tax burdens and the down payment required. In other words, you cannot simply look at the house price listed in a brochure. There are many other cost components that need to be calculated from the beginning.
Interestingly, KPR financing remains the main option for people purchasing homes. According to a Bank Indonesia survey, home purchases through KPR financing accounted for 67.6% of total home purchases.
This figure shows that bank financing continues to play a major role in Bali’s primary property market. For potential buyers, KPR can be an alternative way to purchase a home without having to provide the entire amount of money in cash.
From the developer’s perspective, property development still relies heavily on internal funding. This source accounted for 56.6%. Meanwhile, financing through bank loans accounted for 35.3%. The remainder came from customer funds at 5.9% and loans from non-bank financial institutions at 2.2%. This funding composition shows that developers still need a well-planned financing strategy to ensure that their projects can run according to plan.
If you are considering buying a house, villa, or other types of property, don’t rush into a decision just because the price looks attractive. Besides the price, there are several other things you need to consider, such as:
1. Calculate the Total Cost
Don’t only include the price of the land or building in your budget. Also calculate taxes, licensing fees, construction costs, legal expenses, and other potential costs that may arise.
2. Check the Property’s Legal Status
Make sure the land status and property documents are clear and properly verified. This step is important so you don’t run into administrative problems later on.
3. Consider the Location
Location has a major influence on property value. Denpasar, Badung, Tabanan, Gianyar, Klungkung, and Buleleng each have different market characteristics.
4. Work with a Professional Advisor
If the process feels complicated, you may want to consider professional assistance from experts who understand the property market and investment processes in Bali.
Pandara Prima is a Bali-based company specializing in Business Management and Investment Services. Pandara Prima supports both domestic and international investors, from finding land and planning to handling permits, construction, and property management.
Its services include property agency, general contracting, building permits, business permits, villa management, and various other investment-related needs. Its service areas include Denpasar, Badung, Tabanan, Gianyar, Klungkung, and Buleleng. If you want to make the investment process more practical, secure, and transparent, you can learn more about Pandara Prima’s services at https://pandaraprima.com/.
Bank Indonesia expects residential property prices to potentially continue increasing in the third quarter of 2026. The increase is expected to affect both land and house prices, whether properties are purchased through cash transactions or KPR financing.
However, the increase is expected to remain limited. Developers also need to be cautious when setting prices because sales conditions continue to face several challenges. So, Bali’s primary property market is indeed continuing to move upward, but the decision to purchase property still needs to be made carefully. Don’t just look at price trends. Check the location, legal status, overall costs, financing scheme, and property potential before making a decision.
