Moratorium on hotel and villa construction in Bali to be introduced from October 2024

A moratorium on the construction of hotels and villas will come into force in Bali in early October 2024, as announced by Indonesian Minister of Tourism and Creative Economy Sandiaga Uno. The new law, which provides for the regulation of tourist construction on the island, is in the final stages of consideration and will be officially published in the near future.

Terms of validity and prospects

The moratorium is expected to be in effect for 3 to 5 years. During this period, an analysis of the effectiveness of the measures taken will be conducted. If necessary, the ban can be extended for a longer period. Initially, the possibility of introducing a moratorium for 10 years was considered, but the final decision will be made after assessing the results of the first years of the law's operation.

Reasons for the ban

The moratorium is being introduced for two key reasons:

1. Protection of agricultural land: The rapidly growing tourism sector has led to uncontrolled development. Stopping construction will help protect important agricultural land.
2. Reducing the burden on infrastructure: Roads, especially in popular areas of Bali, are already suffering from traffic jams. Restricting construction will help ease this burden.

Impact on the real estate market

The restrictions apply to four central areas of Bali - Denpasar, Badung, Gianyar and Tabanan. The northern, western and eastern regions, where tourist construction is still underdeveloped, will not be affected by the moratorium. This may encourage developers to actively develop less popular, but no less picturesque, areas of the island.

The moratorium is expected to lead to an increase in housing prices in restricted areas, since new projects will be prohibited there. Real estate in these areas will become even more attractive, which may increase its shortage and increase demand.

Investment Prospects

Regardless of the final decision of the authorities, Bali will remain one of the most attractive regions for real estate investment.

If you are planning to buy real estate on this island, think about it now, as restrictions on construction may affect the market and further price changes.