Published on and written by Cyril Jarnias
In an increasingly interconnected world, the repercussions of the war in Ukraine extend far beyond European borders, affecting even distant markets like real estate in Bali, Indonesia.
This paradise island, prized for its enchanting landscapes and thriving tourism-based economy, is now witnessing a transformation in real estate dynamics due to current global upheavals.
As investors seek stable economic sanctuaries, Bali is becoming a destination of choice, amplifying pressures on its local markets.
This article explores how this distant conflict influences real estate trends in Bali and what this means for the future of the sector in this coveted region.
Analyzing the Geopolitical Consequences of the War in Ukraine on Bali Real Estate
The war in Ukraine has profoundly redefined international investment dynamics, generating notable consequences for Bali’s real estate market.
Redirection of International Investments
- The geopolitical instability created by the conflict in Ukraine is pushing many investors to seek markets considered as safe havens or more stable.
- Emerging markets like Indonesia, and particularly Bali, are benefiting from this shift in capital flows. This trend is also observed in other countries perceived as safe or alternatives to Western markets subject to volatility and sanctions.
- Bali is thus attracting a growing share of foreign investors seeking to diversify their real estate assets in the face of increased risks in Eastern Europe.
Evolution of Foreign Purchases on the Island
- The number of international buyers, particularly from countries directly affected or concerned by the war (Ukraine, Russia), is increasing. This phenomenon is fueled by the search for stability and the desire to secure their assets outside conflict zones.
- There is also a broadening of the buyer profile: beyond the traditional European or Australian residential tourism, there is now an increased presence of buyers from Central and Eastern Europe as well as the Middle East.
| Buyer Profile Before 2022 | Buyer Profile Since 2022 |
|---|---|
| Primarily Australia, Western Europe | Diversification towards Central/Eastern Europe (Russia/Ukraine), Middle East |
Influence of Global Economic Uncertainty on Local Decisions
- Global macroeconomic uncertainty induced by the conflict is slowing some real estate projects: expected rise in global interest rates, increased currency volatility, and difficulty in anticipating market evolution.
- Nevertheless, some investors favor Bali for its high rental potential and ability to generate attractive returns quickly despite the uncertain global context.
List of Main Impacts:
- Temporary but marked increase in the volume of foreign acquisitions
- Upward trend in some high-end/luxury segments
- Strengthening of the relative weight of short-term rental investment
Indonesian Government Policies Influenced by These Dynamics
The Indonesian state is gradually adjusting its mechanisms in order to:
- Attract more foreign capital while preserving some local control;
- Facilitate legal access to the real estate market for non-residents through simplified creation of PT PMA companies fully owned by foreigners;
These measures significantly increase Bali’s attractiveness to international investors concerned with both legal and tax security.
Key Points Regarding These Policies:
- Simplified creation for foreign companies (PT PMA) allowing direct acquisition
- Enhanced monitoring against excessive speculation that could destabilize local prices
- Continuous adaptation according to regional/global geopolitical context
In summary, the war in Ukraine is accelerating a structural trend: the emergence of Bali as a safe haven destination in the global real estate portfolio thanks to its relatively stable image amid major geopolitical turbulence. Local regulatory adjustments support this dynamic while seeking a balance between international openness and national protection.
Good to Know:
The war in Ukraine has redirected international investments, increasing interest in markets perceived as safe havens, including real estate in Bali. In response to geopolitical tensions, foreign buyers, particularly from European countries, are showing renewed enthusiasm for the island. Global economic uncertainty has reinforced caution among some investors, reducing overall transaction volume but encouraging a more selective and strategic market in Bali. Indonesian government policies, aiming to stabilize the economy in the face of geopolitical dynamics, could adjust tax regulations or facilitate accessibility for foreign investors, making Bali more attractive despite the tense global situation.
The Impact of the Ukrainian Crisis on the Balinese Real Estate Market
The geopolitical instability generated by the Ukrainian crisis has had direct and indirect repercussions on the behavior of foreign investors, particularly Europeans, in the Balinese real estate market. This period of uncertainty in Eastern Europe has resulted in a redefinition of capital flows and a partial shift in demand towards markets considered more stable or offering safe haven potential.
Main Changes Observed in Real Estate Demand in Bali Since 2022:
- Increase in the number of foreign investors seeking to secure their assets outside Europe, motivated by the political and economic instability linked to the war in Ukraine.
- Marked rise in interest for properties with high rental potential in sought-after neighborhoods like Canggu, Berawa, or Ubud.
- Increased search for properties offering strong legal security and stable profitability in the face of international currency fluctuations.
| Influencing Factor | Impact on the Balinese Real Estate Market |
|---|---|
| Currency Fluctuations | Relative depreciation of some European currencies making investments in Asia more attractive for certain profiles. Trend partially offset by increased volatility of the US dollar (currency commonly used in transactions). |
| Capital Migrations | Redirection of investments from Central/Eastern Europe to Bali perceived as a safe alternative; notable arrival of Russian-speaking investors but also Western Europeans seeking asset diversification. |
| Economic Policies | Gradual adaptation to new expectations: reinforced supply in the high-end segment; multiplication of projects with turnkey rental management to meet international demand. |
Testimonials and Sector Analyses
“We clearly observe that each major wave of uncertainty in Europe translates here into a renewed international interest, particularly European. Buyers are primarily seeking legal stability, reliable rental yield, and advantageous tax framework,” explains a local real estate agent specialized in the premium segment.
According to several international experts interviewed in early 2025, the overall volume of transactions by non-residents increased between 8% and 12% since the beginning of the Ukrainian conflict—a dynamic fueled by both individuals and family private funds concerned with asset protection.
Recent Data (2022–2025) on Purchases/Sales:
- Sectors such as Canggu/Berawa show a continuous increase in price per square meter (+7% annual average), driven mainly by this new European clientele.
- Ubud now attracts more buyers from Northwestern Europe wishing to combine secure investment and environmental quality.
- The total number of sales to foreign buyers has steadily increased despite some temporary episodes related to global health restrictions.
Summary
The Ukrainian crisis thus acts as a catalyst accelerating the globalization of the Balinese real estate market: it durably modifies the foreign buyer typology while pushing local developers to adapt their offerings to these new security and asset needs.
Good to Know:
The Ukrainian crisis has had a notable impact on the Balinese real estate market, particularly by disrupting foreign investment flows, mainly European. Faced with geopolitical uncertainty, a redirection of European investors towards markets perceived as stable, like Bali, is observed, despite challenges related to currency fluctuations and local economic reforms. Real estate transactions recorded a significant increase, with heightened interest in high-end residences and villas, encouraged by an influx of capital seeking safe havens. Local real estate experts confirm that this enthusiasm is fueled by factors like the euro’s depreciation, making investments in rupiah more attractive. Recent data reveal an approximately 20% increase in property acquisitions by foreign buyers compared to the previous year, suggesting that Bali is taking advantage of this instability to capture a new clientele.
Repercussions of the Influx of Ukrainian Refugees on Housing in Bali
The arrival of Ukrainian refugees in Bali since the beginning of the conflict has been marked by a progressive but relatively moderate increase compared to other exile destinations. Available official statistics indicate that the majority of Ukrainian refugees settled in countries neighboring Ukraine, notably Germany, France, or Poland. Figures concerning Indonesia, and more particularly Bali, do not appear among the main international databases on migration flows related to this conflict.
However, estimates from local and sector sources mention several hundred to a few thousand Ukrainian nationals who have chosen Bali as a temporary or semi-permanent destination since 2022. These arrivals are part of a growing trend observed particularly in the second half of 2023 and throughout 2024.
The direct repercussions on the Balinese real estate market are mainly manifested by a notable increase in demand for certain specific types of accommodations:
- Furnished apartments located near urban centers (Canggu, Seminyak)
- Single-family homes for long-term rental
- Collective housing or coliving adapted for extended stays
This phenomenon has contributed to accentuating the existing pressure on the Balinese rental stock intended for expatriates and digital nomads.
Comparative Table of Sought-After Housing
| Type of Housing | Relative Demand | Preferred Neighborhoods |
|---|---|---|
| Furnished Apartments | High | Canggu, Seminyak |
| Single-Family Homes | Medium | Ubud, Sanur |
| Coliving/Shared Housing | Growing | Denpasar |
The immediate effect on prices has resulted in a noticeable increase in rents in some sought-after areas. Local real estate agents observed an average price increase between 10% and 20% for long-term rentals in these high-demand neighborhoods during the period from spring 2023 to mid-2025. This rise is attributed not only to the influx of Ukrainians but also to that of other expatriate communities attracted by the Balinese lifestyle.
Faced with this new situation, various measures have been considered or implemented:
- Administrative facilitation of temporary stay for humanitarian reasons
- Occasional tax incentives granted to landlords renting their properties to refugees
- Municipal pilot projects aimed at rapid creation of temporary modular units for displaced populations
Experts interviewed highlight several major challenges: structural lack of affordable offers for a financially vulnerable public; difficulty of social integration; lasting inflationary risks on some real estate segments; new opportunities however to energize the intermediate rental sector (coliving).
Several professionals note that this influx could initiate a lasting transformation of the local real estate market:
“The sudden but stable arrival of Ukrainian families is leading developers and local real estate agencies to rethink their offerings towards more contract flexibility as well as increased development of shared housing,” explains a principal agent operating between Canggu and Ubud.
“If this trend were to persist beyond the current context, it could accelerate architectural diversification as well as stimulate private investment in structures adapted for extended stays without land ownership,” estimates a sector consultant based in Denpasar.
In the long term, it is likely that this exogenous shock will contribute not only to the temporary but also potentially structural strengthening of the mid-to-high-end Balinese rental segment—and perhaps initiate a movement towards greater social inclusion via public/private partnerships around regulated accessible housing.
Good to Know:
Since the beginning of the conflict in Ukraine, Bali has seen the arrival of approximately 10,000 Ukrainian refugees, leading to a notable increase in demand for housing, particularly for apartments and houses rather than collective housing. This pressure has led to a rise in rents in some popular neighborhoods of the island. In response, Balinese authorities have implemented incentive programs aimed at encouraging rental to refugees and are considering the construction of temporary housing. Local real estate experts emphasize that this influx constitutes both a challenge and an opportunity to rethink the current infrastructure, potentially durably transforming the Balinese real estate market. If this situation persists, it could force a reevaluation of housing policies and impact rental practices in the long term.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
