Is Bali property a bubble?

Fair question, and the honest answer is that Bali is two markets right now and only one of them looks stretched.

What is not a bubble

Demand is real and measurable. Nearly 7 million foreign arrivals in 2025, up almost 10% year on year. Australia alone accounts for 1.63 million. The airport is expanding from roughly 24 to 32 million passengers.

Luxury operators have committed. Bulgari, Six Senses and Alila do not guess.

And supply of the thing that actually matters is capped. Not land, which exists, but properly zoned, permitted, licensable land, which is a fraction of the island and is getting harder to add to rather than easier.

That is not the shape of a bubble. That is scarcity meeting demand.

What does look stretched

The oversupply is in one specific thing: small villas in Canggu marketed on rental yield.

Everyone built the same product for the same guest. Nightly rates in that segment are being squeezed by the volume of near-identical options, while land prices kept climbing on the assumption that rates would not soften.

When the advertised yield stops arriving, the price paid for the land stops making sense. That is the part to be careful with.

The split

The thing that changed in 2026

Bali closed several accommodation classifications to new foreign-owned companies in July. That does two things at once: it makes it harder to add new licensed rental supply, and it makes existing properly licensed assets more valuable.

Policy is tightening, not loosening. That supports the compliant end of the market and squeezes the informal end.

The practical answer

If you are buying a compliant asset with a long term at a price that works at 60% occupancy, the bubble question does not really apply to you.

If you are buying on a 12% projection in a saturated pocket, you are the reason people ask the question.

Run the numbers properly and it usually answers itself.