Bali Commercial Property Index Drops as Tourist Rental Patterns Shift, Q2 2026
According to a Bank Indonesia Bali survey, Bali's commercial property price index fell 4.99% year-on-year in Q2 2026, driven partly by foreign tourists shifting to shorter stays. While hotel and office rental prices declined, apartment and retail rental rates rose.
Bank Indonesia's Bali representative office (KPwBI Bali) announced on August 13, 2026, that the region's commercial property price index fell 4.99% year-on-year in the second quarter of 2026. This marks a slight improvement from the first quarter's -5.85% decline, but the downward trend continues.
According to KPwBI Bali chief Achris Sarwani, one contributing factor is a shift in foreign tourists' rental patterns. Tourists renting apartments, who previously favored longer stays of 6-12 months, are now increasingly opting for shorter stays of 1-2 months, partly due to the growing availability of alternative accommodations such as villas and resorts with better facilities. Since monthly short-term rentals typically command higher rates than long-term leases, apartment rental prices rose 20.27% year-on-year, while retail rental prices were nearly flat, up just 0.03%.
Meanwhile, hotel prices fell 5.25% and office rental prices dropped 2.51% year-on-year. Increased competition and high price sensitivity among domestic tourists have weighed on hotel demand, along with a still-limited recovery in foreign tourist arrivals amid global geopolitical uncertainty.
Bali's overall commercial property demand index also contracted 5.50% year-on-year in Q2, though this was an improvement from -9.27% in Q1. Some star-rated hotels reportedly continue adding rooms as a long-term strategy to prepare for an expected recovery in tourist arrivals. Recovery in the commercial property sector is anticipated to be supported by the upcoming peak tourist season, particularly with visitors from Australia.
Things to Consider
If you're looking for long-term apartment or villa rentals in Bali, note that short-term contracts (1-2 months) tend to carry higher per-month rates; negotiating a 6-month or longer lease could reduce overall costs. When choosing accommodation, compare facilities and pricing between villas/resorts and apartments, visit multiple properties in person, and clarify contract terms (cancellation policies, rate adjustment risks) before signing. Residents considering property investment or rental business should factor in softening hotel and office demand and consider focusing on apartment or retail properties, which are showing stronger demand growth.
Source: Koranjuri.com