Anyone who has ever visited Lombok speaks glowingly of the island’s pristine beaches, laidback lifestyle and unspoiled beauty. Prior to the COVID-19 pandemic, it was the property investment and holiday destination for those in the know. And in the world of the “New Normal”, the appeal of Lombok will only grow.
“Lombok was made for social distancing. Lombok is still a place where you can find a long white sand beach all to yourself, and you certainly will not be entering a crowded office here. And there is no need to live within the confines of a small apartment, think a spacious villa for you and your family,” Tom Merrett, Founder of Reef Property Lombok, explains.
Merrett notes that 2020 was altogether a positive year for the Lombok property market, but one trend in particular sticks out. The pandemic has sped up acceptance of flexible and remote working and this has had an immediate impact on the local real estate market.
“We have seen increased demand from buyers looking for land and villas that are suitable for second homes. Suddenly, Lombok is not seen as just a place for a ‘holiday home’ but a location for a true second home for overseas purchasers to use for leisure and work,” Merrett states.
The relaxed lifestyle is what first drew Merrett to Indonesia in the first place. The real estate industry veteran had a successful career in Australia with Colliers International and Savills before eventually settling in Lombok and starting his agency, Reef Property Lombok.
“I had been a regular visitor to Lombok for 15 years and decided to set up Reef Property Lombok in 2016 to fill a gap in the market for professional real estate advice,” Lombok says. “My background is in Commercial Property so I felt I could bring a more wholistic approach to providing advice to both pure investors as well as more lifestyle-orientated purchasers.”
A look at Lombok
Bali has long been the premier property and holiday destination in Indonesia having built a global reputation. However, the government has worked to promote Lombok over the past decade while carrying out work on key infrastructure projects.
Of course, promoting Lombok wasn’t all that difficult. The seemingly an endless supply of white sand beaches featuring sparkling, bluish green waters made it anyone who saw photos of the island want to visit. Perhaps the only thing stopping more people from going there prior to 2011 was the journey.
However, the opening of Lombok International Airport almost a decade ago proved to be the shot in the arm the island needed. These days there are now direct connections to Singapore, Perthand Kuala Lumpur from Lombok. There are also numerous flights between Bali and Lombok. This journey takes roughly 30 minutes and numerous carriers serve the route while those coming from further afield will need to transit through Bali.
Getting there now is easier said than done and travel restrictions remain the biggest challenge for Lombok this year. While expats from Europe have returned, other key markets for the island remain closed.
“Limited travel from Hong Kong and Singapore may have some impact on the property market here. While we have seen plenty of buyers entering Indonesia in recent months largely from Europe, expat buyers from Asia are traditionally strong markets for Lombok,” Merrett reports. “Although once those buyers from do start to come back, I think we will see an immediate rise in pricing due to the pent-up demand.”
A bright future
Lombok may not have been immune from the COVID-19 pandemic but the market has already recovered. This may be surprising on the surface. However, it actually makes a lot of sense when you think about it.
“I must admit I thought the travel restrictions would slow transactions, and they did briefly, but as we come to the end of the year it clearly has been a record year of sales for us at Reef Property. From July we saw the market roar back into life especially with buyers from Europe traveling more freely,” Merrett says.
He continues, “People seem to be coming to the realization that if you do not need to spend all your time in a big city. Why not spend your time somewhere that is not only far more affordable, but also offers an upgrade in your lifestyle?”
Investing in Lombok now, regardless of your reason, also presents a unique opportunity as the island transforms into one of Southeast Asia’s leading property and holiday destinations. Seeing the Lombok market mature is one of the things Merrett is most excited about.
“Lombok is evolving from a place that was dominated by land speculation to a location where people are developing high end villas and boutique rental accommodation. Seeing high quality construction projects underway has been the biggest change recently and I am excited to see the results of some of these impressive designs,” Merrett points out. “These higher-end projects are also leading to the opening of new restaurants, beach clubs and retail in and around the Kuta area in South Lombok. The dining scene has changed dramatically in the last couple of years and we are excited about what 2021 will bring.”
Another exciting change are the improvements the government is making as it relates to foreign investment. For overseas buyers, investing in Indonesian property has never been easier.
“The simplifying of foreign company (PT PMA) set up laws and legal processes makes it much easier and quicker for foreign buyers to put in place the necessary legal frameworks to invest in Indonesian property,” Merrett states. “Further streamlining of these systems, which are expected, will have a significant effect on increasing foreign investment into Lombok and Indonesia in general.”
A true gem
For those who choose to buy real estate in Lombok, they are getting much more than a property. This your chance to live in an island paradise and enjoy a lifestyle you probably dream about. It’s something Merrett experiences on a daily basis and recommends to just about everyone.
“Lombok for me is the perfect balance of that dream remote island lifestyle while still being totally accessible. I can go for a jog 20 minutes from my house and feel I am in the middle of nowhere and return to town for dinner with friends in a top-quality restaurant,” Merrett details. “I would recommend Lombok to all active and fun-loving people. Lombok is particularly popular with young couples and families who love the outdoors; kids absolutely love it here.”
There is more to buying a Lombok property than the lifestyle. From a financial perspective, it also makes a lot of sense. An undersupplied market seeing growing demand means investors will be well positioned to see strong returns and capital appreciation.
“In terms of the property market I would recommend it to people seeking a relaxed lifestyle, good value and a high yielding investment,” Merrett notes. “Lombok has an undersupply of villas, so if you have accommodation here you are set to benefit from the strong rental income for the foreseeable future and likely some strong capital gain.”
For more information on Reef Property Lombok, visit: reefpropertylombok.com