Is buying a property in Ubud a good investment?

Last updated on December 20, 2023

Yes, the analysis of Bali's property market is included in our pack

If you've enjoyed the cultural richness and natural beauty of Ubud, you might have considered settling down in this scenic part of Bali, experiencing its serene ambiance and proximity to artistic attractions.

Is it a good idea though? What's the current state of the real estate market in that area? Are property values appreciating or depreciating? Are investors seeing returns on their real estate investments? How's the demand for rentals?

We'll answer all these questions for you! When building and updating our property pack for Indonesia, our team has been researching and surveying this area. In fact, there is significant customer interest in investing there. Therefore, we believe it would be beneficial to include some information about it in our property pack.

Why do property buyers like investing in Ubud?

Ubud, nestled in the heart of Bali, has become a magnet for property buyers, offering a unique blend of cultural richness, natural beauty, and a serene lifestyle.

This fascination with Ubud isn't new; it began gaining international attention in the early 2000s, largely thanks to its portrayal in popular culture and travel literature. Its charm has continued to grow, making it a sought-after location for those looking to invest in real estate.

What sets Ubud apart from other real estate markets, particularly within Bali, is its distinct character. Unlike areas like Seminyak or Kuta, known for their vibrant nightlife and beachfront properties, Ubud offers a tranquil escape.

It's a place where the lush green of rice paddies, the intricate beauty of traditional Balinese architecture, and the spiritual ambiance of Hindu temples coalesce.

This unique combination is hard to find elsewhere, making Ubud particularly attractive to those seeking more than just a property but a lifestyle deeply connected to nature and culture.

However, this popularity does have a flip side. The real estate market in Ubud has seen significant price increases over the years. While this is good news for investors, it's also an indicator that the 'hype' around Ubud isn't just a fleeting trend. The demand for property here has shown a consistent upward trajectory.

This is backed by facts like increasing tourism numbers, a growing expatriate community, and the rise of digital nomads choosing Ubud as their base. All these factors contribute to a dynamic and robust property market.

Ubud attracts a diverse range of people. It's a haven for artists, writers, and creatives, drawn by its artistic heritage and inspiring landscapes. Wellness enthusiasts are also a significant part of the community, with the town's numerous yoga studios, retreats, and organic eateries.

Moreover, Ubud's appeal extends to retirees looking for a peaceful lifestyle and digital nomads seeking a balance between work and leisure in a scenic setting.

Yet, despite its many strengths, Ubud isn't without its challenges. The influx of tourists and new residents can sometimes strain its infrastructure. Traffic congestion is a growing concern, and the increasing development poses a risk to the very natural beauty that draws people here.

Make a profitable investment in Bali

Better information leads to better decisions. Save time and money. Download our guide.

Why is Ubud a nice place to live?

Ubud is renowned for its enchanting blend of culture, nature, and a relaxed lifestyle, making it an attractive place to live.

The lifestyle in Ubud is a harmonious mix of traditional Balinese culture and modern conveniences. The town is famous for its artistic heritage, evident in the numerous art galleries and craft markets. Residents often find themselves immersed in a world where ancient temples coexist with trendy cafes and yoga studios.

The expat community in Ubud is thriving and diverse. People from all over the world have settled here, attracted by the serene environment and cultural richness.

This community has created a melting pot of ideas and activities, ranging from spiritual retreats to creative workshops. As a result, newcomers often find it easy to integrate and connect with like-minded individuals.

Living costs in Ubud can vary. While it's generally more affordable than many Western countries, the influx of tourists and expats has led to a rise in prices. Housing can range from relatively inexpensive local-style homes to luxurious villas.

Everyday expenses like food and transportation are reasonably priced, but imported goods and upscale services can be costly.

Safety in Ubud is typically not a major concern. It's known for being a peaceful area with a low crime rate. As with any popular tourist destination, it's wise to be cautious with personal belongings and mindful of general safety practices.

Ubud boasts a range of amenities and facilities catering to both local and expat residents. For educational needs, there's the Green School, an international school known for its eco-friendly approach and innovative curriculum.

Health care facilities include the BIMC Hospital Ubud, offering a range of medical services. Shopping and dining options are plentiful, with local markets like the Ubud Traditional Art Market and modern shopping centers like Ubud Village Mall.

The quality of infrastructure in Ubud is a mix. While the town has seen improvements, some areas still have basic roads and limited utilities. Internet connectivity has improved significantly, with many cafes and homes having access to reliable Wi-Fi, essential for the digital nomad community.

Accessibility to Ubud from other parts of Bali and major transport hubs like Ngurah Rai International Airport is relatively straightforward. It's about a 1.5-hour drive from the airport, depending on traffic.

However, public transportation options are limited. Most residents and visitors rely on scooters or private cars for daily commute. Taxis and ride-hailing apps like Gojek are also commonly used for longer distances.

How much does it cost to buy real estate in Ubud?

If you need a detailed and updated analysis of the prices, rents and yields, you can get our full guide about real estate investment in Indonesia.

When considering buying property in Ubud you'll find a diverse range of options, from modest apartments to sprawling luxury villas.

The types of residential properties available reflect Ubud's unique blend of traditional Balinese culture and modern living. Among these, luxury villas and traditional houses, often with lush gardens and pools, are particularly in high demand.

This demand is driven by Ubud's reputation as a tranquil and culturally rich destination, attracting both investors and those seeking a serene lifestyle.

In terms of the real estate market, Ubud has seen a mix of both new developments and resale properties. New developments often cater to those seeking modern amenities and designs, while resale properties offer the charm and character of traditional Balinese architecture.

The balance between preserving the cultural essence of Ubud and accommodating modern living preferences is a key factor in the property market here.

The price range for properties in Ubud varies widely. For a rough estimate, prices per square meter can range from moderate to quite high, especially for luxury properties with extensive features and prime locations.

Over recent years, property values in Ubud have generally seen an upward trend. This increase is attributed to Ubud's growing popularity as a tourist destination and its appeal to expatriates and digital nomads.

Looking at the future, the real estate market in Ubud shows potential for continued growth. This is contingent on several factors, including tourism trends, the global economy, and local regulations.

Upcoming developments and city planning changes could also significantly impact property values. Infrastructure improvements or new cultural attractions could enhance the appeal of living in Ubud, thus increasing demand for properties.

As for predictions for the coming years, it's reasonable to expect that properties in desirable locations, especially those offering unique architectural features or proximity to Ubud's cultural centers, will continue to be in high demand.

Factors like Ubud's status as a cultural hub, the growing interest in sustainable and wellness-oriented lifestyles, and the allure of living in a beautiful, natural environment indicate a potential increase in property values.

Where is the best area to buy a property in Ubud?

When considering where to buy property in Ubud it's essential to understand that different parts of Ubud offer varied atmospheres, property types, and prices.

Ubud is a mosaic of unique neighborhoods, each with its own charm and appeal, which can significantly influence your property buying decision.

Central Ubud is often the first choice for those who want to be in the heart of it all. Here, you're close to the town's famous markets, restaurants, and cultural attractions like the Royal Palace and Ubud Monkey Forest. Properties in central Ubud range from traditional Balinese homes to modern apartments.

However, due to its popularity, prices in this area tend to be higher, and it can get quite bustling, which might not suit those seeking tranquility.

Moving away from the center, areas like Penestanan, Tegallalang, and Sayan offer a more serene environment. Penestanan is known for its artistic community and charming rice field walks.

Tegallalang, slightly farther out, is famous for its stunning rice terraces and more rural setting. Sayan, on the other hand, boasts luxurious villas overlooking the Ayung River, making it a favorite among those looking for upscale living.

In these areas, you can find a mix of traditional and modern properties, often with beautiful natural surroundings. The prices can vary, but generally, they offer more value for money compared to the central area.

For buyers interested in up-and-coming areas, neighborhoods like Mas and Nyuh Kuning are gaining popularity. Mas is renowned for its woodcarving heritage and offers a more authentic Balinese living experience.

Nyuh Kuning, located near the Monkey Forest, is known for its peaceful environment and strong community feel. These areas are becoming increasingly sought after for their blend of culture, tranquility, and relatively more affordable property prices.

On the contrary, certain areas might be less advisable for property buyers. Regions that are too remote may lack basic amenities and could pose challenges in terms of accessibility and infrastructure.

Also, areas that are overly commercialized might lose their Balinese charm and could be crowded, especially during peak tourist seasons.

Here is a summary table to help you visualize better. If you need more detailed data and information, please check our property pack for Indonesia.

Area	Atmosphere	Property Types	Price Range
Central Ubud	Bustling, cultural hub	Traditional homes, modern apartments	Higher
Penestanan	Artistic, serene	Villas, local houses	Moderate
Tegallalang	Rural, scenic	Traditional homes, land plots	Moderate to Low
Sayan	Upscale, riverside tranquility	Luxury villas	High
Mas	Authentic, cultural	Traditional homes, artisan studios	Moderate
Nyuh Kuning	Peaceful, community-oriented	Modern homes, villas	Moderate

Don't lose money on your property in Bali

100% of people who have lost money in Indonesia have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.

Is there a strong rental demand in Ubud?

Ubud is indeed experiencing a strong rental demand, and understanding the nuances of this market can be crucial if you're considering investing in property there.

The rental demand in Ubud is characterized by both short-term and long-term rentals, but there's a notable variation in the target demographic and property types for each.

Short-term rentals are primarily fueled by tourists and travelers. These guests often look for unique experiences, preferring properties that offer a blend of traditional Balinese charm and modern amenities.

Villas with pools, garden bungalows, and boutique apartments in central Ubud or near popular attractions like the Monkey Forest and rice terraces are especially in demand. Properties in areas like Penestanan and Sayan, known for their serene ambiance and picturesque settings, are also popular.

Short-term renters typically value features like Wi-Fi, air conditioning, and proximity to local attractions and dining options.

On the other hand, long-term rentals cater to a different demographic, including expatriates, digital nomads, and sometimes locals. These renters often seek stability and a sense of community.

They tend to prefer areas like Nyuh Kuning for its peaceful environment and strong community vibe, or Mas, which offers a more authentic Balinese living experience. The types of properties in demand for long-term rentals include furnished apartments, houses with traditional architecture, and modern villas.

Essential amenities for this group include reliable internet, a comfortable workspace, and access to daily needs like supermarkets and healthcare facilities.

Potential returns on investment for rental properties in Ubud can be quite promising, especially with strategic choices. For short-term rentals, you might see a higher turnover and potentially higher rates per night, but this comes with added management requirements.

Long-term rentals might offer lower returns initially but provide more stability and less hands-on management. The exact figures can vary, but a well-located and well-maintained property could yield a significant return, especially if it aligns with the preferences of the target rental market.

In terms of the type of properties getting more demand and potentially better yields, there's a growing interest in properties that offer a blend of traditional Balinese aesthetics and modern luxuries.

Eco-friendly properties and those with unique design features are also gaining popularity, reflecting a broader trend towards sustainable and experiential travel.

To maximize rental appeal and reduce vacancy rates, focusing on the unique selling points of your property is key. For short-term rentals, amenities like a private pool, scenic views, and proximity to tourist hotspots can be significant drawcards.

For long-term rentals, factors like community integration, space for home offices, and ease of access to daily amenities can be more important.

Make sure you understand the real estate market in Bali

Don't rush into buying the wrong property in Indonesia. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.

Is it easy to buy a property as foreigner in Ubud?

Before we answer the question, please know that we have an article dedicated to the experience of buying real estate as a foreigner in Indonesia.

Buying property as a foreigner in Ubud, Bali, can be a complex process, primarily due to Indonesia's property ownership regulations and the unique local market conditions.

Firstly, Indonesia has specific regulations that restrict direct property ownership by foreigners. Foreigners are typically not allowed to own land (freehold ownership) but can secure property under a leasehold arrangement.

Leasehold means you can lease the property for a certain period, usually up to 25 years, and this can be extended. Another option is the 'Hak Pakai' title, a right-to-use title that can be obtained on a freehold land under certain conditions.

The purchasing process in Ubud involves several steps and requires due diligence. Once you've identified a property, it’s essential to verify the property title, ensure that the land certificate, building permit, and tax documents are in order.

The process often involves negotiating terms of the lease or Hak Pakai, payment agreements, and any legalities specific to the property.

There are several risks associated with property investment in Ubud. One primary concern is the legal status of the land. It's not uncommon for foreign buyers to encounter issues with land ownership rights, zoning laws, or incomplete documentation.

A common pitfall for foreign buyers in Ubud is not fully understanding the local property laws. A prevalent issue is the misunderstanding of 'Nominee Agreements,' where a local citizen is registered as the owner on behalf of the foreign buyer.

This practice is legally risky and not advised. Another unique aspect is the cultural and community rights over land, which can sometimes supersede written law.

Working with a local real estate agent or lawyer is not just important but essential. A reputable agent familiar with Ubud's property market can help identify suitable properties and navigate the local nuances.

A lawyer, preferably one experienced in property law and foreign investments in Indonesia, is crucial to ensure all legal aspects are correctly handled.

As for exit strategies, property investors in Ubud typically consider a few options. Reselling the leasehold interest before the lease expires is common, especially if the property has appreciated in value or has been significantly upgraded.

Another strategy is subleasing, which can provide ongoing rental income. It's important to note that leasehold properties become less attractive to buyers as the lease period shortens, which can impact resale value.