Guide: Waterfront Living, Lombok
With land prices well below those of Bali, new infrastructure backed by the Indonesian government, the island seems primed to become the next property hotspot.
Lombok’s rolling green hills, coconut groves and white sand beaches offer a different topography from Bali, Lombok’s illustrious western neighbor, but its landscape is equally stunning. On the west coast, luxury resorts face dramatic sunsets, and a little further north turquoise waters surround the un-motored Gili Islands. On the south coast, a mecca for surfers, waves break onto powdery white sand beaches, and new villas built into the sloping hillsides provide sweeping ocean views.
So far Lombok’s transition into a destination for tourism and real estate has taken longer than anticipated says Stewart Strong, Managing Director at Elite Havens in Lombok. “The formative years in Lombok’s property market from 2007-2011 were characterized by speculative land-banking of uncertified hillsides and to a lesser extent, beachfront land,” he says. A shift occurred when the new International Airport opened in 2011, part of a USD 200 million investment from the Indonesian government, which promised to propel the island into a new development phase. However, Strong says subsequent delays in the completion of key infrastructure and the commencement of the Mandalika Resort project (a large government-backed master planned resort on the south coast) resulted in sluggish progress.
Yet, despite local hiccups and the softening of regional economies, Lombok’s property prices have continued their steady climb. In 2015, prices across the board were up 10-20% year-on-year and 300% over the four-year period from 2011. “As the market matures, sizes are coming down and prices are going up,” Strong says. “The growth has been focused in certain pockets where localized infrastructure and developments are being constructed.”
Much like the Mandalika development, which served as a catalyst for overall market growth in Kuta, Strong says other catalyst projects are paving the way for further development, such as Selong Selo, a luxury villa project in Selong Belanak, and the Royal Tulip, a resort and spa in Are Guling.
To date the Gili Islands have drawn most of the larger scale commercial development, driven by access via fast boats from Bali, as well as local infrastructure such as electricity and water mains from mainland Lombok. Elite Havens is currently marketing a resale villa on Sira Beach, a peninsula that overlooks the Gili Islands. The 3.2-hectare beachfront estate is one of only a handful of villas of this caliber that currently exist on the island. It features six bedrooms and 11,000 sq. ft. of living space with a salt water swimming pool, a tennis court and a palm grove. The beach is just steps away from the villa and the clear warm waters are ideal for snorkeling and diving. To the back of the property is the Kosaido golf course. The estate is located about 1.5 hours drive from Lombok International Airport, or about the same travel time from Bali via speedboat.
Thanks to a new highway from the airport, beachfront areas in the south of the island are now much easier to reach, and this has fuelled increased development to Kuta and Selong Belanak. Located a 25-minute drive from the International Airport, the upcoming Selong Selo resort in the Jabon Hills of Selong Belanak is building a collection of contemporary villas supported by lifestyle facilities that include a private beach club with a restaurant and bar, a spa, pool and tennis court. Investors can choose from several investment options, including subdivided plots with basic infrastructure and turnkey Kayu Villas that come fully furnished with two or three bedrooms and 2,443 sq. ft. of open-plan living space. Currently the project is over 75% sold and the first stages of construction are nearing completion. The last remaining lots were recently released onto the market and comprise eight villas ranging in price from USD 424,000 to USD 503,000.
Developers at Selong Selo have also ensured clearing of land titles, a crucial step for anyone looking to invest in Lombok says Tobi Doeringer, a partner at Private Sanctuary. His company specializes in boutique resort and villa developments around Asia and is currently building several villa projects in south Lombok. Doeringer says investors buying as individuals face higher risks, whereas reputable developers can conduct the due diligence for you. “We always do an extremely thorough pre-purchase review,” he says.
Private Sanctuary’s latest development, Kuta Sunset, features a number of land plots with sea views and the opportunity to construct villas of varying sizes, between two to five bedrooms. The project overlooks the upcoming Mandalika Resort and golf course and is also reached via the new highway, roughly 20 minutes from the airport. In addition to the new highway, electricity and fiber-optic cables have also been expanded to reach new communities in the south, and, as part of the government-backed Mandalika Resort, the area will soon house a large desalination plant and a solar power generator.
As Lombok’s tourism market grows (there were over two million tourist arrivals in 2015, up from 1.3 million in 2013), flights into Lombok’s International Airport are increasing too. Garuda Indonesia now regularly flies 747s over from neighboring Bali, and new international routes are being introduced, including direct flights from Beijing and Hong Kong. Chinese nationals no longer require a tourist visa to enter Indonesia, a change that is bound to impact the local market.
Tobi Doeringer says he has also noted increased demand from local buyers, a testament to Indonesia’s overall economic growth, and a factor that underpins developers’ confidence in Lombok. The country’s economy has been growing rapidly and its property market has followed suit, though recent surges in residential property sales somewhat decelerated in 2015 following robust growth of 40% quarter on quarter in Q4 2014 according to a report from Bank Indonesia.
Nevertheless, Indonesia’s government appears committed to developing tourism in Lombok and beyond. President Joko Widodo has set a goal of growing the tourism market to 20 million visitors annually and he stands in favour of foreign investment and foreign property ownership. For developers in Lombok, it appears there is nowhere to go but up. “If you are looking at a five-year time frame, I would say land prices will be three to five times what they are today,” says Tobi Doeringer. “My tip for anyone who is looking to invest? Buy a larger plot.”
This article was first published in Palace Magazine.