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Coming Bubble for Condotels in Bali?

Bali to Soon Have 13,000 Condotel Units

(8/24/2014) Bisnis Indonesia reports in its July 17, 2014 edition that developers of Condominium Hotels (Condotels) in Bali need to take into consideration the trend of declining occupancies being experienced by hotels.

A study from the Research and Advisory division of Cushman & Wakefield Indonesia estimates there are currently 5,000 Condotel Units operating in Bali with an additional 8,000 Condotel units expected to come on line in the coming few years.

The study calculates that 29% of all Condotel units can be found in Legian and Seminyak, 24% in Jimbaran, 14% in Nusa Dua and the remaining 33% in other locations on the Island.

Cushman & Waverly predicts that Condotel developers will be offering extra points and other incentives to condotel purchasers, enhanced return on investment schemes and options for profit shares after tguarantee periods have ended.

Condotel sales estimated at 93% of available unite may decline over the coming years due to robust development.

To be watched with keen interest is the resale value of Bali’s first generation of condotels to determine theses units true market value as an investment in an arguably oversupplied market.