Ever wondered if building a villa in Bali is actually a smart investment or not?
With Bali’s booming tourism, rising property values, and growing demand for luxury stays, many investors are turning their attention to villa development.
But like any investment, it’s not just about beautiful architecture or location—it’s about making sure your villa delivers strong returns, stability, and long-term value.
In this guide, we’ll walk you through the real numbers, benefits, and challenges of building a villa in Bali and make it as your investment. By the end, you’ll know exactly whether building a villa in Bali is worth it for you or not.
Key Takeaways
- Bali’s property market is evolving, with rising tourism, digital nomads, and eco-conscious development driving long-term demand—especially for compact villas and off-plan projects.
- Average villa ROI ranges from 7–12% per year, with potential up to 20% in premium areas; payback period is around 5–6 years.
- Smaller, smarter investments perform best in 2025. 1–2 bedroom villas dominate sales, and professional management is key to maintaining strong rental returns.
Why Do Many Foreigners Invest in Bali Real Estate?
First of all, why invest in Bali? There are several factors that make Bali’s real estate market different from other countries:
1. Tourism Recovery
Bali’s tourism industry has made a strong comeback since the pandemic. In 2024, the island welcomed over 6.3 million international visitors, a big jump from 4.5 million in 2023.
This steady rise in arrivals continues to boost demand for vacation rentals and hospitality-related investments.
The Ministry of Tourism and Creative Economy of Indonesia has also set ambitious growth goals, showing confidence that this upward trend will continue into 2025.
2. Growth of Digital Nomads
With remote work becoming a global norm, Bali remains a top choice for digital nomads looking for a relaxed lifestyle and strong internet infrastructure. Popular areas like Canggu and Ubud are seeing more long-term rentals and co-living spaces, driven by professionals working online.
Digital nomads now account for about 20% of Bali’s long-term rental market, highlighting the rising demand for fully furnished villas and apartments.
Read More: Who Buys Villas in Bali? Key Buyer Profiles Revealed
3. Shift Toward Sustainable Development
The Bali property market is also moving toward more eco-conscious investments. Many new developments in 2024 have adopted green architecture, using sustainable materials and renewable energy systems.
Eco-villas and environmentally friendly projects are becoming popular among investors and tenants alike. This growing focus on sustainability is expected to keep shaping how villas and resorts are built in the years ahead.
4. Expansion of Indonesia’s Digital Economy
Indonesia’s digital sector continues to thrive. The country’s digital economy is projected to grow by 13% in 2024, reaching a Gross Merchandise Value (GMV) of around USD 90 billion.
This positions Indonesia as Southeast Asia’s largest digital economy, creating a positive ripple effect on real estate, technology hubs, and supporting infrastructure.
5. Reasonable Property Prices
Even though Bali is a famous tropical destination, real estate prices are still quite affordable compared to other islands.
For example, you can purchase an apartment in a desirable location in Bali starting at just USD 83,000. You can see more property listings here on Bali Villa Realty.
These lower prices allow more investors to get involved in the Bali property market easier.
6. Major Infrastructure Developments in Bali
Several infrastructure projects are underway to support Bali’s growing population and tourism. These include new road networks, Bali International Hospital, and the expansion of Ngurah Rai International Airport to handle more international travelers.
The government has also announced plans for a new international airport, which will improve access to less developed areas of the island. Together, these projects are expected to enhance connectivity and drive property investment growth in the coming years.
Read More: Bali vs. Thailand: Which Offers the Best Property Investment?
What’s Really Happening in Bali’s Property Market in 2025?
We’ve talked about what makes Bali attractive for investors. But what’s actually happening in the market right now? Here’s a quick look:
1. New Hotspots Emerging
At the start of 2025, Bali’s property market is entering a more stable and mature phase. Instead of rapid growth, we’re seeing a steady shift toward new development areas such as South Badung and Mengwi.
Investor focus is also changing—from chasing hype to building smarter, more efficient projects like compact villas and off-plan developments that offer stronger long-term performance.
2. Rising Demand for Compact Villas
According to REID, 1- and 2-bedroom villas now make up over 60% of total sales in early 2025. One-bedroom villas lead with 36% of sales, followed by two-bedrooms at 26.7%.
Smaller villas are becoming the new standard because they’re cheaper to build, easier to manage, and faster to rent out—offering better liquidity and more stable returns compared to larger luxury properties.
3. Off-Plan Projects Dominate
Off-plan developments are growing fast, now accounting for 37% of all listings, a 180% year-on-year increase. This shows strong confidence from developers and investors, though it also raises concerns about oversupply if the market grows too quickly.
Buyers are paying higher prices per square meter, betting on future value and project delivery. For now, it’s a sign of trust in Bali’s property sector—but maintaining that trust depends on consistent quality and timely completion.
4. Rental Revenue Under Pressure
On the rental side, occupancy rates rose slightly (+2.3% YoY), yet revenues dropped by 16% as competition intensifies and nightly rates soften.
There are now more villas on the market than ever, which naturally leads to lower nightly rates and tighter profit margins. This doesn’t mean the market is collapsing—rather, the short-term rental boom is stabilizing after the post-pandemic surge.
In other words, Bali’s rental market is finding its balance again, moving toward steady, sustainable growth similar to the period before 2020.
5. More Demand for Professional Management
With tighter competition, investors are becoming more strategic. The share of professionally managed villas rose 30%, showing that owners now prioritize efficiency, guest experience, and consistent ROI over short-term profit.
In summary, Bali’s 2025 property market is more balanced than ever—and yes, owning a villa here is absolutely worth it.
However, investors should focus on smaller builds and smarter investment strategies that match current market demand; aim for sustainable growth and long-term performance rather than short-term gains.
Read More: Buying vs Building Villa in Bali: 9 Key Factors to Consider
How Much Profit Can I Make from a Villa Investment in Bali?
Now, how much money can you make from a villa investment? Here’s the number that you can expect:
- Average ROI: 7–12% per year (it can reach up to 20% in premium areas)
- Rental Yields: 5–10% annually
- Property Value Growth: 5–10% per year
- Payback Period: 5-6 years (after that, any rental income is pure profit!)
For detailed breakdown and real case example, you can check our dedicated article here: How to Figure ROI on Investment Property in Bali
Top Investment Options in Bali
Bali offers a range of investment opportunities to suit different preferences and budgets:
1. Villas
One popular option for investing in Bali is purchasing a private villa.
These luxurious properties often feature beautiful tropical designs with open-air living spaces, private swimming pools, and lush gardens filled with palm trees and exotic plants.
Owning a Bali villa gives you a personal oasis to escape whenever you want a relaxing vacation.
What’s more, when you’re not using the villa, you can rent it to tourists as an income property. Many visitors will pay premium prices to experience the ultimate tropical getaway by staying in their private villa rental.
2. Land
Instead of buying an existing property, some investors purchase vacant land in Bali to build their dream home or development from the ground up.
With a land purchase, you can construct exactly what you envision—a custom luxury villa, an apartment complex with rental units, or commercial properties like shops and restaurants.
Hiring local architects and contractors allows you to design it in a luxurious but with the traditional Balinese style.
Read More: How Much Land Do You Need to Build a Villa in Bali?
3. Apartments
If you don’t need as much space or maintenance as a villa, investing in an apartment or condominium unit can be an excellent option, especially in Bali’s popular beach towns and tourist areas.
Apartment living is very low-maintenance compared to a villa since you don’t have to worry about landscaping, pool upkeep, etc.
Yet apartments can still offer a taste of Balinese luxury with amenities like resort-style pools and lush gardens. You can rent out your unit when you are not using it.
4. Commercial Properties
There is also demand for commercial properties for investors interested in Bali business opportunities beyond residential real estate.
Options include purchasing retail spaces to open shops catering to tourists, buying restaurants or entertainment venues, or acquiring office buildings to lease to other businesses in Bali.
These commercial investments allow you to be part of Bali’s booming tourism and hospitality industries.
Read More: Build Your Own Villa in Bali as Foreigners: Legal Tips and Costs
How Do I Start Building Villa in Bali for Investment?
Building a villa in Bali can be one of the most rewarding investments you’ll ever make, both financially and personally. One of the easiest ways for foreigners to build their dream villa here is by working with a professional and trusted Bali contractor like Ilot Property Bali.
With over 20 years of experience, we provide end-to-end development services, perfect for both personal use and investment purposes. You’ll get a custom villa design created by our award-winning architects, and watch your dream home come to life with our expert construction team.
We don’t stop there. Our villa management services make it simple to run and manage your property rentals.
Want to market your villa or resell it later? We can help with that too!
For more insights about building your own investment property in Bali and to get an estimated ROI, you can contact our team anytime. Click the button below to schedule your free, no-obligation consultation at your convenience
With over 20 years of experience helping expats create their homes in Bali, here’s what we do best:
- Design a villa that matches your style, personality, and vision
- Guide you through the entire building process, from start to finish
- Manage your villa long-term to maximize quality and returns
FAQ
1. Can I airbnb my villa in Bali?
Yes, absolutely! Many villa owners enjoy living in their property for part of the year and rent it out during the remaining months.
2. How much is it to build a villa in Bali?
Construction costs in Bali typically range from around $800 to over $3,000 per square meter, depending on the materials, finishes, and overall build quality you choose.
3. How long does it take to build a villa in Bali?
On average, luxury villas in Bali take about 6 to 12 months to complete.
Conclusion
So, yes, building a villa in Bali can be a smart and profitable investment, as long as it’s done strategically.
The island offers strong tourism growth, affordable property prices, and rising demand for well-designed villas. But success isn’t just about owning land or building a beautiful space. It’s more about planning wisely, following local regulations, and working with the right experts.
If you’re thinking about investing or building your own villa in Bali, our team is here to guide you every step of the way.
Book your free consultation today and start your journey toward owning a profitable villa in paradise.
