Will a Moratorium and Restrictions Help Prevent the Destruction of This Magical Island?
Regulating Construction
Recently, there have been several attempts to regulate construction on Bali. The last major moratorium was introduced in 2011 in the Badung Regency, but it was not very successful. Subsequently, in 2018, a moratorium was declared on the construction of new hotels to alleviate traffic and redirect investments into other sectors.
Area Badung Regency
Current Situation
Since the end of the pandemic, Bali has experienced a massive surge in tourism. There has been a dramatic increase in demand for long-term accommodation due to the highly attractive lifestyle. Bali is a magnet for people who work here and enjoy its exceptional nature, quality food, and eternal summer. These modern residents also significantly drive the local economy.
Melasti Beach in Southern Bali
Moratorium 2024 – How Will Construction Change and What Will the New Restrictions Be?
The new measures focus on the rapid increase in construction in areas like Canggu, Uluwatu, and southern Bali. One of the issues is non-compliance with zoning regulations, as many plots were originally classified for agricultural purposes rather than commercial or tourist use. These measures are also intended to alleviate worsening traffic conditions and the formation of traffic jams that currently plague some areas. Local government officials believe that these measures will help improve the situation and quality of life in Bali in the long term. It is estimated that the new rules will be in effect for 5 to 10 years from their implementation.
Another Issue – Inexperienced Developers
One serious problem in Bali's real estate sector is the presence of developers with minimal or no experience, who often unknowingly or deliberately violate regulations. As a result, there can be delays in construction or quality issues, posing risks for investors and their return on investment.
What the Regulations Do Not Cover
The new rules do not apply to ongoing projects where developers have sufficient experience to handle all necessary steps and documentation. In such cases, the restrictions will not be applied retroactively.
Villa Near Melasti Beach
Conclusion
From an investor's perspective, it is crucial to focus on experienced developers with a proven track record who can collaborate with competent authorities. The new rules aim to improve conditions, protect investors from risks, and mitigate traffic congestion and potential devastation of the island. Investments from inexperienced developers and projects priced below market levels are particularly risky.
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