Across the globe, landlords who relied heavily on visiting tourists, students and business travelers lost income during the worst of the pandemic travel restrictions.
Revenue losses have forced many landlords to lower short-term rental rates in the hope of attracting bargain hunters, to offer discounts on initial rates for new long-term tenants, and to increase existing and returning tenant rates.
This nightmare and catastrophic rental management has not stopped after governments lifted restrictions earlier this year. In many countries, attempts by locals to stabilize economies, coupled with national and international crises, have driven up the cost of living and rents, even as tourists, remote workers and digital nomads have shown a renewed interest.
In Bali, tariffs have become so high that permanent, native-born and expatriate residents, as well as visitors, cannot find any relief. Some real estate tenants have seen increases of 14% to 50% overnight, particularly in hotels and in areas where landlords don’t often offer legally binding agreements.
Many experts believe that this problem goes beyond the pandemic and the woes of the local economy. The Omnibus Law of 2020 passed in Bali gave foreigners the right to buy, own and resell land and structures, meaning many foreign investors brought to Bali high rental rates found in their own country.
The United States and European countries serve as a warning about the likely future of Bali’s rental and property markets. Rising rental rates as landlords take advantage of increased demand have led to increased homelessness among middle-class residents.