Bali’s Residential Property Prices edged up in the fourth quarter of 2025, signaling continued resilience in the island’s primary housing market. The latest Residential Property Price Survey shows that the Residential Property Price Index (IHPR) grew 1.06 percent year-on-year.
Although this figure slightly trails the 1.08 percent growth recorded in the previous quarter, it confirms that the market remains on a positive path. Despite higher mortgage interest rates and rising construction costs, demand continues to support price stability across segments.
Bali Residential Property Prices Rise Across All Housing Segments
Price growth occurred across every residential category in the primary market. Small houses with building sizes of up to 36 square meters recorded the strongest increase, rising 1.57 percent year-on-year. Meanwhile, medium-sized houses between 36 and 70 square meters grew 1.12 percent. Larger houses above 70 square meters increased 0.82 percent.
These figures show broad-based price adjustments rather than isolated gains in one segment. As a result, both entry-level buyers and higher-end purchasers faced moderate price increases during the quarter.
“These data show that demand and price adjustments are occurring evenly across all market segments, from simple housing to large-sized homes,” said R. Erwin Soeriadimadja, Head of the Bali Provincial Representative Office of Bank Indonesia.
This balanced growth suggests that the market still attracts interest from diverse buyer groups. It also indicates that developers continue to adjust pricing in line with cost and demand dynamics.
Rising Construction Costs Drive Price Growth
Higher building costs played a central role in pushing prices upward. Developers reported continuous increases in construction material prices throughout the year. At the same time, labor wages also climbed. Together, these factors raised overall development expenses.
“The increase in IHPR at the end of 2025 was mainly driven by higher building prices,” Erwin explained.
Developers, therefore, adjusted selling prices to maintain project viability. Importantly, this trend did not emerge suddenly. Instead, it followed patterns seen in earlier quarters.
“This trend is relatively consistent with the previous quarter,” he added.
Rather than aggressive demand spikes, supply-side pressures largely shaped the latest price movement. Consequently, cost management now plays a crucial role in sustaining market stability.
Mortgage Rates and Financing Shape Buyer Activity
Although residential property prices in Bali continued to grow, several financing challenges limited stronger sales momentum. Mortgage interest rates remained a primary concern for buyers. In addition, high down payment requirements and property taxes weighed on purchasing decisions. Limited land availability in Bali also constrained supply expansion.
Even so, mortgage financing still dominates home purchases. Buyers used mortgage loans, commonly known as KPR, for 62.4 percent of total residential transactions. This figure highlights the banking sector’s vital role in supporting housing demand.
On the development side, most developers relied on internal funding. Their own capital accounted for 55.9 percent of project financing.
“The remainder comes from bank loans, customer funds, and loans from non-bank financial institutions,” Erwin said.
This financing structure shows that developers maintain cautious expansion strategies. At the same time, banks continue to underpin both construction and end-user demand.
Bali Residential Property Prices Show Stable Outlook for 2026
Overall, Bali Residential Property Prices reflect a market that continues to expand at a measured pace. Growth remains modest but consistent. Developers face higher costs, while buyers navigate mortgage rate pressures. Nevertheless, price increases remain controlled and spread across segments.
Looking ahead, sustainable growth will depend on balanced policies and disciplined cost control. Developers must manage construction expenses carefully. Meanwhile, supportive mortgage conditions can help maintain purchasing power.
If these factors align, Bali’s residential property market can preserve stability in 2026. The latest data, therefore, reinforces confidence that the sector still holds steady prospects despite ongoing financial and cost pressures.
Source: kabarnusa.com, balinetizen.com
Image: Ana Florescu / Canva
