The Rising Cost of Land in Lombok
Over the past six years of operating in the South Lombok area, Invest Islands has collected a vast amount of data on wholesale land transactions. The pricing in the graph below has been converted to hard currency and is wholesale land, meaning unserviced and more than 5,000 square-metres in size.
One important consideration when purchasing unserviced land is whether there is an adequate water supply and it is in close proximity to the power grid. Digging boreholes and installing off-grid power is a hugely expensive exercise when done on a small scale.
The value increase per annum in Lombok was already considerable courtesy of both the commencement of the Indonesian Government’s US$3 billion Mandalika Project and the completion of the Lombok International Airport. What our data shows, however, is that there is no sign of a slowdown and as progress on Mandalika continues prices will rise further. It is also highly likely complementary independent projects will start to come online too.
The official confirmation that the 2021 Indonesian MotoGP will be held in Lombok has already resulted in a knock-on effect in terms of tourism facilities, opportunities, and land prices. As expected, the major surge is most obvious in Kuta near to the Mandalika Street Circuit, where prices here have already hit US$250 per sqm. And while the land prices in surrounding areas remain relatively low, they are rising rapidly, creating ideal investment conditions for those who act decisively.
LOMBOK’S BEST INVESTMENT OPPORTUNITIES
Land owned by Invest Islands have experienced remarkable growth in recent years. This can be attributed to several factors, including both natural appreciation and forced appreciation.
Natural appreciation is the result of an increase in tourism, zoning and the fact the land is all in prime locations. Forced appreciation, in contrast, is the result of basic infrastructure that was not previously present, such as water and electricity access, as well as paved access roads. A thorough due diligence process that secures the land titles and the GPS coordinates to a national standard set by the Indonesian National Land Registry also positively affects lands prices.
The selection of prime locations, be it beachfront or hilltop properties with all-ocean views, provides investors an excellent advantage regardless of whether they are land-banking or constructing their own property.
The increased development by competitors within certain areas such as Torok Bay increases the organic appreciation of the area in general, cementing the likelihood of appreciation. The masterplan of Invest Islands’ Torok Hills resort has further increased the demand for land and consequently the liquidity of the market.
Awang area is currently experiencing a sharp increase in value as well courtesy of its proximity to the Mandalika Street Circuit and Tanjung Aan Beach, one of the most picturesque beaches on the island. Added features of properties here include full panoramic views of both Mount Rinjani to the north and the Indian Ocean to the south.
Meanwhile, the Meang area is just 45 minutes from the airport yet is still offering investors premium beachfront land for under the US$100 per sqm threshold. The proximity to the Lembar seaport, which provides access to the ‘Secret Gili Islands’ of Sekotong, and the gorgeous Pengantap Bay make Meang an optimal investment opportunity that will not be available for much longer.